Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 27, 2020 | |
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35565 | |
Entity Registrant Name | AbbVie Inc. | |
Entity Central Index Key | 0001551152 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 32-0375147 | |
Entity Address, Address Line One | 1 North Waukegan Road | |
Entity Address, City or Town | North Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60064-6400 | |
City Area Code | 847 | |
Local Phone Number | 932-7900 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,765,473,923 | |
Common Stock [Member] | NEW YORK STOCK EXCHANGE, INC. [Member] | ||
Entity Information | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ABBV | |
Security Exchange Name | NYSE | |
Common Stock [Member] | CHICAGO STOCK EXCHANGE, INC [Member] | ||
Entity Information | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ABBV | |
Security Exchange Name | CHX | |
Sec 1.375 Senior Notes Due 2024 [Member] | NEW YORK STOCK EXCHANGE, INC. [Member] | ||
Entity Information | ||
Title of 12(b) Security | 1.375% Senior Notes due 2024 | |
Trading Symbol | ABBV24 | |
Security Exchange Name | NYSE | |
Sec 0.750 Senior Notes Due 2027 [Member] | NEW YORK STOCK EXCHANGE, INC. [Member] | ||
Entity Information | ||
Title of 12(b) Security | 0.750% Senior Notes due 2027 | |
Trading Symbol | ABBV27 | |
Security Exchange Name | NYSE | |
Sec 2.125 Senior Notes due 2028 [Member] | NEW YORK STOCK EXCHANGE, INC. [Member] | ||
Entity Information | ||
Title of 12(b) Security | 2.125% Senior Notes due 2028 | |
Trading Symbol | ABBV28 | |
Security Exchange Name | NYSE | |
Sec 1.250 Senior Notes due 2031 | NEW YORK STOCK EXCHANGE, INC. [Member] | ||
Entity Information | ||
Title of 12(b) Security | 1.250% Senior Notes due 2031 | |
Trading Symbol | ABBV31 | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net revenues | $ 12,902 | $ 8,479 | $ 31,946 | $ 24,562 |
Cost of products sold | 5,050 | 1,920 | 10,703 | 5,433 |
Selling, general and administrative | 2,846 | 1,657 | 8,068 | 4,991 |
Research and development | 1,706 | 2,285 | 4,667 | 4,865 |
Acquired in-process research and development | 45 | 0 | 898 | 246 |
Total operating costs and expenses | 9,647 | 5,862 | 24,336 | 15,535 |
Operating earnings | 3,255 | 2,617 | 7,610 | 9,027 |
Interest expense, net | 620 | 420 | 1,662 | 1,054 |
Net foreign exchange loss | 20 | 19 | 54 | 31 |
Other expense, net | 115 | 177 | 989 | 2,590 |
Earnings before income tax expense | 2,500 | 2,001 | 4,905 | 5,352 |
Income tax expense | 187 | 117 | 321 | 271 |
Net earnings | 2,313 | 1,884 | 4,584 | 5,081 |
Net earnings attributable to noncontrolling interest | 5 | 0 | 4 | 0 |
Net earnings attributable to AbbVie Inc. | $ 2,308 | $ 1,884 | $ 4,580 | $ 5,081 |
Per share data | ||||
Basic earnings per share (in dollars per share) | $ 1.30 | $ 1.27 | $ 2.78 | $ 3.41 |
Diluted earnings per share (in dollars per share) | $ 1.29 | $ 1.26 | $ 2.77 | $ 3.41 |
Weighted-average basic shares outstanding (in shares) | 1,769 | 1,481 | 1,633 | 1,480 |
Weighted-average diluted shares outstanding (in shares) | 1,774 | 1,483 | 1,637 | 1,483 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 2,313 | $ 1,884 | $ 4,584 | $ 5,081 |
Foreign currency translation adjustments, net of tax expense (benefit) of $15 for the three months and $11 for the nine months ended September 30, 2020 and $(16) for the three months and $(10) for the nine months ended September 30, 2019 | 512 | (256) | 726 | (288) |
Net investment hedging activities, net of tax expense (benefit) of $(85) for the three months and $(125) for the nine months ended September 30, 2020 and $45 for the three months and $53 for the nine months ended September 30, 2019 | (314) | 156 | (455) | 184 |
Pension and post-employment benefits, net of tax expense (benefit) of $10 for the three months and $37 for the nine months ended September 30, 2020 and $7 for the three months and $19 for the nine months ended September 30, 2019 | 35 | 33 | 134 | 78 |
Marketable security activities, net of tax expense (benefit) of $— for the three months and $— for the nine months ended September 30, 2020 and $— for the three months and $— for the nine months ended September 30, 2019 | 0 | (1) | 0 | 10 |
Cash flow hedging activities, net of tax expense (benefit) of $(9) for the three months and $(13) for the nine months ended September 30, 2020 and $18 for the three months and $9 for the nine months ended September 30, 2019 | (57) | 31 | (68) | (32) |
Other comprehensive income (loss) | 176 | (37) | 337 | (48) |
Comprehensive income | 2,489 | 1,847 | 4,921 | 5,033 |
Comprehensive income attributable to noncontrolling interest | 5 | 0 | 4 | 0 |
Comprehensive income attributable to AbbVie Inc. | $ 2,484 | $ 1,847 | $ 4,917 | $ 5,033 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax expense (benefit) | $ 15 | $ (16) | $ 11 | $ (10) |
Net investment hedging activities, tax expense (benefit) | (85) | 45 | (125) | 53 |
Pension and post-employment benefits, tax expense (benefit) | 10 | 7 | 37 | 19 |
Marketable security activities, tax expense (benefit) | 0 | 0 | 0 | 0 |
Cash flow hedging activities, tax expense (benefit) | $ (9) | $ 18 | $ (13) | $ 9 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and equivalents | $ 7,890 | $ 39,924 |
Short-term investments | 60 | 0 |
Accounts receivable, net | 8,416 | 5,428 |
Inventories | 3,474 | 1,813 |
Prepaid expenses and other | 3,169 | 2,354 |
Total current assets | 23,009 | 49,519 |
Investments | 246 | 93 |
Property and equipment, net | 4,986 | 2,962 |
Intangible assets, net | 74,643 | 18,649 |
Goodwill | 42,801 | 15,604 |
Other assets | 3,936 | 2,288 |
Total assets | 149,621 | 89,115 |
Current liabilities | ||
Short-term borrowings | 54 | 0 |
Current portion of long-term debt and finance lease obligations | 4,723 | 3,753 |
Accounts payable and accrued liabilities | 19,404 | 11,832 |
Total current liabilities | 24,181 | 15,585 |
Long-term debt and finance lease obligations | 82,282 | 62,975 |
Deferred income taxes | 4,485 | 1,130 |
Other long-term liabilities | 23,384 | 17,597 |
Commitments and contingencies | ||
Stockholders’ equity (deficit) | ||
Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,789,544,701 shares issued as of September 30, 2020 and 1,781,582,608 as of December 31, 2019 | 18 | 18 |
Common stock held in treasury, at cost, 24,250,071 shares as of September 30, 2020 and 302,671,146 as of December 31, 2019 | (1,972) | (24,504) |
Additional paid-in capital | 17,148 | 15,193 |
Retained earnings | 3,335 | 4,717 |
Accumulated other comprehensive loss | (3,259) | (3,596) |
Total stockholders' equity (deficit) | 15,270 | (8,172) |
Noncontrolling interest | 19 | 0 |
Total equity (deficit) | 15,289 | (8,172) |
Total liabilities and equity | $ 149,621 | $ 89,115 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 4,000,000,000 | 4,000,000,000 |
Common stock, issued (in shares) | 1,789,544,701 | 1,781,582,608 |
Common stock held in treasury, at cost (in shares) | 24,250,071 | 302,671,146 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common stock | Treasury stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Noncontrolling interest |
Beginning balance at Dec. 31, 2018 | $ (8,446) | $ 18 | $ (24,108) | $ 14,756 | $ 3,368 | $ (2,480) | $ 0 |
Beginning balance (in shares) at Dec. 31, 2018 | 1,479 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings attributable to AbbVie Inc. | 5,081 | $ 0 | 0 | 0 | 5,081 | 0 | 0 |
Other comprehensive income (loss), net of tax | (48) | 0 | 0 | 0 | 0 | (48) | 0 |
Dividends declared | (4,776) | 0 | 0 | 0 | (4,776) | 0 | 0 |
Purchases of treasury stock | (425) | $ 0 | (425) | 0 | 0 | 0 | 0 |
Purchases of treasury stock (in shares) | (5) | ||||||
Stock-based compensation plans and other | 388 | $ 0 | 32 | 356 | 0 | 0 | 0 |
Stock-based compensation plans and other (in shares) | 5 | ||||||
Ending balance at Sep. 30, 2019 | (8,226) | $ 18 | (24,501) | 15,112 | 3,673 | (2,528) | 0 |
Ending balance (in shares) at Sep. 30, 2019 | 1,479 | ||||||
Beginning balance at Jun. 30, 2019 | (8,566) | $ 18 | (24,505) | 15,028 | 3,384 | (2,491) | 0 |
Beginning balance (in shares) at Jun. 30, 2019 | 1,478 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings attributable to AbbVie Inc. | 1,884 | $ 0 | 0 | 0 | 1,884 | 0 | 0 |
Other comprehensive income (loss), net of tax | (37) | 0 | 0 | 0 | 0 | (37) | 0 |
Dividends declared | (1,595) | 0 | 0 | 0 | (1,595) | 0 | 0 |
Purchases of treasury stock | (3) | $ 0 | (3) | 0 | 0 | 0 | 0 |
Purchases of treasury stock (in shares) | 0 | ||||||
Stock-based compensation plans and other | 91 | $ 0 | 7 | 84 | 0 | 0 | 0 |
Stock-based compensation plans and other (in shares) | 1 | ||||||
Ending balance at Sep. 30, 2019 | (8,226) | $ 18 | (24,501) | 15,112 | 3,673 | (2,528) | 0 |
Ending balance (in shares) at Sep. 30, 2019 | 1,479 | ||||||
Beginning balance at Dec. 31, 2019 | (8,172) | $ 18 | (24,504) | 15,193 | 4,717 | (3,596) | 0 |
Beginning balance (in shares) at Dec. 31, 2019 | 1,479 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings attributable to AbbVie Inc. | 4,580 | $ 0 | 0 | 0 | 4,580 | 0 | 0 |
Other comprehensive income (loss), net of tax | 337 | 0 | 0 | 0 | 0 | 337 | 0 |
Dividends declared | (5,962) | 0 | 0 | 0 | (5,962) | 0 | 0 |
Common shares and equity awards issued for acquisition of Allergan plc | 24,409 | $ 0 | 23,166 | 1,243 | 0 | 0 | 0 |
Common shares issued to Allergan plc stockholders (in shares) | 286 | ||||||
Purchases of treasury stock | (682) | $ 0 | (682) | 0 | 0 | 0 | 0 |
Purchases of treasury stock (in shares) | (7) | ||||||
Stock-based compensation plans and other | 760 | $ 0 | 48 | 712 | 0 | 0 | 0 |
Stock-based compensation plans and other (in shares) | 7 | ||||||
Change in noncontrolling interest | 19 | $ 0 | 0 | 0 | 0 | 0 | 19 |
Ending balance at Sep. 30, 2020 | 15,289 | $ 18 | (1,972) | 17,148 | 3,335 | (3,259) | 19 |
Ending balance (in shares) at Sep. 30, 2020 | 1,765 | ||||||
Beginning balance at Jun. 30, 2020 | 14,732 | $ 18 | (1,958) | 16,953 | 3,130 | (3,435) | 24 |
Beginning balance (in shares) at Jun. 30, 2020 | 1,764 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings attributable to AbbVie Inc. | 2,308 | $ 0 | 0 | 0 | 2,308 | 0 | 0 |
Other comprehensive income (loss), net of tax | 176 | 0 | 0 | 0 | 0 | 176 | 0 |
Dividends declared | (2,103) | 0 | 0 | 0 | (2,103) | 0 | 0 |
Purchases of treasury stock | (20) | $ 0 | (20) | 0 | 0 | 0 | 0 |
Purchases of treasury stock (in shares) | 0 | ||||||
Stock-based compensation plans and other | 201 | $ 0 | 6 | 195 | 0 | 0 | 0 |
Stock-based compensation plans and other (in shares) | 1 | ||||||
Change in noncontrolling interest | (5) | $ 0 | 0 | 0 | 0 | 0 | (5) |
Ending balance at Sep. 30, 2020 | $ 15,289 | $ 18 | $ (1,972) | $ 17,148 | $ 3,335 | $ (3,259) | $ 19 |
Ending balance (in shares) at Sep. 30, 2020 | 1,765 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net earnings | $ 4,584 | $ 5,081 |
Adjustments to reconcile net earnings to net cash from operating activities: | ||
Depreciation | 439 | 346 |
Amortization of intangible assets | 3,967 | 1,162 |
Deferred income taxes | (498) | (77) |
Change in fair value of contingent consideration liabilities | 1,078 | 2,653 |
Stock-based compensation | 617 | 351 |
Upfront costs and milestones related to collaborations | 1,028 | 341 |
Intangible asset impairment | 0 | 1,030 |
Other, net | 491 | 92 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (574) | (207) |
Inventories | (193) | (401) |
Prepaid expenses and other assets | 190 | (89) |
Accounts payable and other liabilities | 1,903 | 494 |
Income tax assets and liabilities, net | (298) | (727) |
Cash flows from operating activities | 12,734 | 10,049 |
Cash flows from investing activities | ||
Acquisition of businesses, net of cash acquired | (38,138) | 0 |
Other acquisitions and investments | (1,072) | (476) |
Acquisitions of property and equipment | (519) | (389) |
Purchases of investment securities | (47) | (579) |
Sales and maturities of investment securities | 1,464 | 2,655 |
Other, net | 1,382 | 0 |
Cash flows from investing activities | (36,930) | 1,211 |
Cash flows from financing activities | ||
Net change in commercial paper borrowings | 0 | (699) |
Repayments of other short-term borrowings | 0 | (3,000) |
Proceeds from issuance of long-term debt | 3,000 | 1,534 |
Repayments of long-term debt and finance lease obligations | (4,414) | (5) |
Repayments of long-term debt and finance lease obligations | (20) | (248) |
Dividends paid | (5,615) | (4,771) |
Purchases of treasury stock | (682) | (627) |
Proceeds from the exercise of stock options | 109 | 6 |
Payments of contingent consideration liabilities | (212) | (120) |
Other, net | 28 | 36 |
Cash flows from financing activities | (7,806) | (7,894) |
Effect of exchange rate changes on cash and equivalents | (32) | (7) |
Net change in cash and equivalents | (32,034) | 3,359 |
Cash and equivalents, beginning of period | 39,924 | 7,289 |
Cash and equivalents, end of period | 7,890 | 10,648 |
Supplemental schedule of non-cash investing and financing activities | ||
Issuance of common shares associated with acquisitions of businesses | $ 23,979 | $ 0 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Historical Presentation The unaudited interim condensed consolidated financial statements of AbbVie Inc. (AbbVie or the company) have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the company’s audited consolidated financial statements and notes included in the company’s Annual Report on Form 10-K for the year ended December 31, 2019 . It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of the company’s financial position and operating results. Net revenues and net earnings for any interim period are not necessarily indicative of future or annual results. Certain reclassifications were made to conform the prior period interim condensed consolidated financial statements to the current period presentation. On May 8, 2020, AbbVie completed its previously announced acquisition of Allergan plc (Allergan). Refer to Note 4 for additional information regarding this acquisition. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU No. 2016-13 In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326) . The standard changes how credit losses are measured for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, the standard requires the use of a new forward-looking "expected credit loss" model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. AbbVie adopted the standard in the first quarter of 2020. The adoption did not have a material impact on the company's consolidated financial statements. Upon adoption of the standard, accounts receivable are stated at amortized cost less allowance for credit losses. The allowance for credit losses reflects the best estimate of future losses over the contractual life of outstanding accounts receivable and is determined on the basis of historical experience, specific allowances for known troubled accounts, other currently available information including customer financial condition, and both current and forecasted economic conditions. There were no significant changes in credit loss risk factors that impacted the company's recorded allowance during the nine months ended September 30, 2020 . Recent Accounting Pronouncements Not Yet Adopted ASU No. 2019-12 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) . The standard includes simplifications related to accounting for income taxes including removing certain exceptions related to the approach for intraperiod tax allocation and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard will be effective for AbbVie starting with the first quarter of 2021. AbbVie is currently assessing the impact of adopting this guidance but does not expect a material impact on its consolidated financial statements. |
Supplemental Financial Informat
Supplemental Financial Information | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Financial Information | |
Supplemental Financial Information | Supplemental Financial Information Interest Expense, Net Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Interest expense $ 630 $ 480 $ 1,825 $ 1,225 Interest income (10 ) (60 ) (163 ) (171 ) Interest expense, net $ 620 $ 420 $ 1,662 $ 1,054 Inventories (in millions) September 30, 2020 December 31, 2019 Finished goods $ 1,444 $ 485 Work-in-process 1,295 942 Raw materials 735 386 Inventories $ 3,474 $ 1,813 Property and Equipment (in millions) September 30, 2020 December 31, 2019 Property and equipment, gross $ 10,391 $ 8,188 Accumulated depreciation (5,405 ) (5,226 ) Property and equipment, net $ 4,986 $ 2,962 Depreciation expense was $175 million for the three months and $439 million for the nine months ended September 30, 2020 and $114 million for the three months and $346 million for the nine months ended September 30, 2019 . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share AbbVie grants certain restricted stock units (RSUs) that are considered to be participating securities. Due to the presence of participating securities, AbbVie calculates earnings per share (EPS) using the more dilutive of the treasury stock or the two-class method. For all periods presented, the two-class method was more dilutive. The following table summarizes the impact of the two-class method: Three months ended Nine months ended (in millions, except per share data) 2020 2019 2020 2019 Basic EPS Net earnings attributable to AbbVie Inc. $ 2,308 $ 1,884 $ 4,580 $ 5,081 Earnings allocated to participating securities 17 10 44 27 Earnings available to common shareholders $ 2,291 $ 1,874 $ 4,536 $ 5,054 Weighted-average basic shares outstanding 1,769 1,481 1,633 1,480 Basic earnings per share attributable to AbbVie Inc. $ 1.30 $ 1.27 $ 2.78 $ 3.41 Diluted EPS Net earnings attributable to AbbVie Inc. $ 2,308 $ 1,884 $ 4,580 $ 5,081 Earnings allocated to participating securities 17 10 44 27 Earnings available to common shareholders $ 2,291 $ 1,874 $ 4,536 $ 5,054 Weighted-average shares of common stock outstanding 1,769 1,481 1,633 1,480 Effect of dilutive securities 5 2 4 3 Weighted-average diluted shares outstanding 1,774 1,483 1,637 1,483 Diluted earnings per share attributable to AbbVie Inc. $ 1.29 $ 1.26 $ 2.77 $ 3.41 Certain shares issuable under stock-based compensation plans were excluded from the computation of EPS because the effect would have been antidilutive. The number of common shares excluded was insignificant for all periods presented. |
Licensing, Acquisitions, and Ot
Licensing, Acquisitions, and Other Arrangements | 9 Months Ended |
Sep. 30, 2020 | |
Licensing, Acquisitions, and Other Arrangements | |
Licensing, Acquisitions, and Other Arrangements | Licensing, Acquisitions and Other Arrangements Acquisition of Allergan On May 8, 2020, AbbVie completed its previously announced acquisition of all outstanding equity interests in Allergan in a cash and stock transaction. Allergan is a global pharmaceutical leader focused on developing, manufacturing and commercializing branded pharmaceutical, device, biologic, surgical and regenerative medicine products for patients around the world. The combination creates a diverse entity with leadership positions across immunology, hematologic oncology, aesthetics, neuroscience, eye care and women's health . AbbVie's existing product portfolio and pipeline is enhanced with numerous Allergan assets and Allergan's product portfolio benefits from AbbVie's commercial strength, expertise and international infrastructure. Under the terms of the acquisition, each ordinary share of Allergan common stock was converted into the right to receive (i) $120.30 in cash and (ii) 0.8660 of a share of AbbVie common stock. Total consideration for the acquisition of Allergan is summarized as follows: (in millions) Cash consideration paid to Allergan shareholders (a) $ 39,675 Fair value of AbbVie common stock issued to Allergan shareholders (b) 23,979 Fair value of AbbVie equity awards issued to Allergan equity award holders (c) 430 Total consideration $ 64,084 (a) Represents cash consideration transferred of $120.30 per outstanding Allergan ordinary share based on 330 million Allergan ordinary shares outstanding at closing. (b) Represents the acquisition date fair value of 286 million shares of AbbVie common stock issued to Allergan shareholders based on the exchange ratio of 0.8660 AbbVie shares for each outstanding Allergan ordinary share at the May 8, 2020 closing price of $83.96 per share. (c) Represents the pre-acquisition service portion of the fair value of 11 million AbbVie stock options and 8 million RSUs issued to Allergan equity award holders. The acquisition of Allergan has been accounted for as a business combination using the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The valuation of assets acquired and liabilities assumed has not yet been finalized as of September 30, 2020 . As a result, AbbVie recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquisition date fair value of intangible assets, goodwill, property and equipment, inventories and income taxes among other items. The completion of the valuation will occur no later than one year from the acquisition date. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash and equivalents $ 1,537 Short-term investments 1,421 Accounts receivable 2,423 Inventories 2,340 Prepaid expenses and other current assets 1,984 Investments 137 Property and equipment 1,912 Intangible assets Developed product rights 58,280 In-process research and development 1,040 Other noncurrent assets 1,452 Short-term borrowings (60 ) Current portion of long-term debt and finance lease obligations (1,899 ) Accounts payable and accrued liabilities (5,813 ) Long-term debt and finance lease obligations (18,937 ) Deferred income taxes (4,068 ) Other long-term liabilities (4,728 ) Total identifiable net assets 37,021 Goodwill 27,063 Total assets acquired and liabilities assumed $ 64,084 The fair value step-up adjustment to inventories of $1.2 billion is being amortized to cost of products sold when the inventory is sold to customers, which is expected to be within approximately one year from the acquisition date. Intangible assets relate to $58.3 billion of developed product rights and $1.0 billion of in-process research and development (IPR&D). The acquired definite-lived intangible assets are being amortized over a weighted-average estimated useful life of approximately 9 years using the estimated pattern of economic benefit. The estimated fair values of identifiable intangible assets were determined using the "income approach" which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the more significant assumptions inherent in the development of these asset valuations include the estimated net cash flows for each year for each asset or product (including net revenues, cost of products sold, research and development (R&D) costs, selling and marketing costs and contributory asset charges), the appropriate discount rate necessary to measure the risk inherent in each future cash flow stream, the life cycle of each asset, the potential regulatory and commercial success risk, competitive trends impacting the asset and each cash flow stream, as well as other factors. The fair value of long-term debt was determined by quoted market prices as of the acquisition date and the total purchase price adjustment of $1.3 billion is being amortized as a reduction to interest expense, net over the lives of the related debt. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recognized from the acquisition of Allergan represents the value of additional growth platforms and an expanded revenue base as well as anticipated operational synergies and cost savings from the creation of a single combined global organization. The goodwill is not deductible for tax purposes. Following the acquisition date, the operating results of Allergan have been included in the condensed consolidated financial statements. For the period from the acquisition date through September 30, 2020 , net revenues attributable to Allergan were $5.9 billion and operating losses attributable to Allergan were $1.5 billion , inclusive of $2.6 billion of intangible asset amortization and $964 million of inventory fair value step-up amortization. Acquisition-related expenses, which were comprised primarily of regulatory, financial advisory and legal fees, totaled $781 million for the nine months ended September 30, 2020 and $26 million for the three months and $50 million for the nine months ended September 30, 2019 and were included in selling, general and administrative (SG&A) expenses in the condensed consolidated statements of earnings . There were no acquisition-related expenses for the three months ended September 30, 2020 . Pro Forma Financial Information The following table presents the unaudited pro forma combined results of AbbVie and Allergan for the three and nine months ended September 30, 2020 and 2019 as if the acquisition of Allergan had occurred on January 1, 2019: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Net revenues $ 12,902 $ 12,428 $ 36,663 $ 36,085 Net earnings (loss) 2,829 977 6,142 (2,615 ) The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of AbbVie and Allergan. In order to reflect the occurrence of the acquisition on January 1, 2019 as required, the unaudited pro forma financial information includes adjustments to reflect incremental amortization expense to be incurred based on the current preliminary fair values of the identifiable intangible assets acquired; the incremental cost of products sold related to the fair value adjustments associated with acquisition date inventory; the additional interest expense associated with the issuance of debt to finance the acquisition; and the reclassification of acquisition-related costs incurred during the three and nine months ended September 30, 2020 to the nine months ended September 30, 2019 . The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2019. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition. Other Licensing & Acquisitions Activity Cash outflows related to other acquisitions and investments totaled $1.1 billion for the nine months ended September 30, 2020 and $476 million for the nine months ended September 30, 2019 . AbbVie recorded acquired IPR&D charges of $45 million for the three months and $898 million for the nine months ended September 30, 2020 . AbbVie recorded no acquired IPR&D charges for the three months and $246 million for the nine months ended September 30, 2019 . Genmab A/S In June 2020, AbbVie and Genmab A/S (Genmab) entered into a collaboration agreement to jointly develop and commercialize three of Genmab's early-stage investigational bispecific antibody therapeutics and entered into a discovery research collaboration for future differentiated antibody therapeutics for the treatment of cancer. Under the terms of the agreement, Genmab granted to AbbVie an exclusive license to its epcoritamab (DuoBody-CD3xCD20), DuoHexaBody-CD37 and DuoBody-CD3x5T4 programs. For epcoritamab, the companies will share commercial responsibilities in the U.S. and Japan, with AbbVie responsible for further global commercialization. Genmab will record net revenues in the U.S. and Japan, and the parties will share equally in pre-tax profits from these sales. Genmab will receive tiered royalties on remaining global sales. For the discovery research partnership, Genmab will conduct Phase 1 studies for these programs and AbbVie retains the right to opt-in to program development. AbbVie made an upfront payment of $750 million , which was recorded to IPR&D in the nine months ended September 30, 2020 . AbbVie could make additional payments of up to $3.2 billion upon the achievement of certain development, regulatory and commercial milestones for all programs. I-Mab Biopharma In September 2020, AbbVie and I-Mab Biopharma (I-Mab) entered into a collaboration agreement for the development and commercialization of lemzoparlimab, an anti-CD47 monoclonal antibody internally discovered and developed by I-Mab for the treatment of multiple cancers. Both companies will collaborate to design and conduct further global clinical trials to evaluate lemzoparlimab. The collaboration provides AbbVie an exclusive global license, excluding greater China, to develop and commercialize lemzoparlimab. The companies will share manufacturing responsibilities with AbbVie being the primary manufacturer for global supply. The agreement also allows for potential collaboration on future CD47-related therapeutic agents, subject to further licenses to explore each other's related programs in their respective territories. The terms of the arrangement include an initial upfront payment of $180 million to exclusively license lemzoparlimab along with a milestone payment of $20 million based on the Phase I results, for a total of $200 million , which is expected to be recorded to IPR&D in the fourth quarter of 2020 after regulatory approval of the transaction. In addition, I-Mab will be eligible to receive up to $1.7 billion upon the achievement of certain clinical development, regulatory and commercial milestones, and AbbVie will pay tiered royalties from low-to-mid teen percentages on global net revenues outside of greater China. Luminera In October 2020, AbbVie entered into an agreement with Luminera, a privately held aesthetics company based in Israel, to acquire Luminera's full dermal filler portfolio and R&D pipeline including HArmonyCa, a dermal filler intended for facial soft tissue augmentation, for an aggregate purchase price comprised of an upfront payment of approximately $121 million plus contingent consideration up to $90 million upon achievement of certain commercial milestones. HArmonyCa is currently commercially available in Israel and Brazil and AbbVie will continue to develop this product for its international and U.S. markets. |
Collaborations
Collaborations | 9 Months Ended |
Sep. 30, 2020 | |
Collaborative Arrangements [Abstract] | |
Collaborations | Collaborations The company has ongoing transactions with other entities through collaboration agreements. The following represent the significant collaboration agreements impacting the periods ended September 30, 2020 and 2019 . Collaboration with Janssen Biotech, Inc. In December 2011, Pharmacyclics, a wholly-owned subsidiary of AbbVie, entered into a worldwide collaboration and license agreement with Janssen Biotech, Inc. and its affiliates (Janssen), one of the Janssen Pharmaceutical companies of Johnson & Johnson, for the joint development and commercialization of Imbruvica, a novel, orally active, selective covalent inhibitor of Bruton's tyrosine kinase (BTK) and certain compounds structurally related to Imbruvica, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States. The collaboration provides Janssen with an exclusive license to commercialize Imbruvica outside of the United States and co-exclusively with AbbVie in the United States. Both parties are responsible for the development, manufacturing and marketing of any products generated as a result of the collaboration. The collaboration has no set duration or specific expiration date and provides for potential future development, regulatory and approval milestone payments of up to $200 million to AbbVie. The collaboration also includes a cost sharing arrangement for associated collaboration activities. Except in certain cases, Janssen is responsible for approximately 60% of collaboration development costs and AbbVie is responsible for the remaining 40% of collaboration development costs. In the United States, both parties have co-exclusive rights to commercialize the products; however, AbbVie is the principal in the end-customer product sales. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Sales of Imbruvica are included in AbbVie's net revenues . Janssen's share of profits is included in AbbVie's cost of products sold . Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share. Outside the United States, Janssen is responsible for and has exclusive rights to commercialize Imbruvica. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. AbbVie's share of profits is included in AbbVie's net revenues . Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share. The following table shows the profit and cost sharing relationship between Janssen and AbbVie: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 United States - Janssen's share of profits (included in cost of products sold) $ 524 $ 489 $ 1,467 $ 1,297 International - AbbVie's share of profits (included in net revenues) 251 215 750 621 Global - AbbVie's share of other costs (included in respective line items) 74 81 211 230 AbbVie’s receivable from Janssen, included in accounts receivable, net, was $276 million at September 30, 2020 and $235 million at December 31, 2019 . AbbVie’s payable to Janssen, included in accounts payable and accrued liabilities, was $468 million at September 30, 2020 and $455 million at December 31, 2019 . Collaboration with Genentech, Inc. AbbVie and Genentech, Inc. (Genentech), a member of the Roche Group, are parties to a collaboration and license agreement executed in 2007 to jointly research, develop and commercialize human therapeutic products containing BCL-2 inhibitors and certain other compound inhibitors which includes Venclexta, a BCL-2 inhibitor used to treat certain hematological malignancies. AbbVie shares equally with Genentech all pre-tax profits and losses from the development and commercialization of Venclexta in the United States. AbbVie pays royalties on Venclexta net revenues outside the United States. AbbVie manufactures and distributes Venclexta globally and is the principal in the end-customer product sales. Sales of Venclexta are included in AbbVie's net revenues. Genentech's share of United States profits is included in AbbVie's cost of products sold. AbbVie records sales and marketing costs associated with the United States collaboration as part of SG&A expenses and global development costs as part of R&D expenses, net of Genentech’s share. Royalties paid for Venclexta revenues outside the United States are also included in AbbVie’s cost of products sold. The following table shows the profit and cost sharing relationship between Genentech and AbbVie: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Genentech's share of profits, including royalties (included in cost of products sold) $ 139 $ 89 $ 390 $ 220 AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A) 9 9 34 27 AbbVie's share of development costs (included in R&D) 27 32 88 94 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table summarizes the changes in the carrying amount of goodwill: (in millions) Balance as of December 31, 2019 $ 15,604 Additions (a) 27,063 Foreign currency translation adjustments 134 Balance as of September 30, 2020 $ 42,801 (a) Goodwill additions related to the acquisition of Allergan in the second quarter of 2020 (see Note 4 ). The company performs its annual goodwill impairment assessment in the third quarter, or earlier if impairment indicators exist. As of September 30, 2020 , there were no accumulated goodwill impairment losses. Intangible Assets, Net The following table summarizes intangible assets: September 30, 2020 December 31, 2019 (in millions) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets Developed product rights $ 78,451 $ (9,917 ) $ 68,534 $ 19,547 $ (6,405 ) $ 13,142 License agreements 7,828 (2,759 ) 5,069 7,798 (2,291 ) 5,507 Total definite-lived intangible assets $ 86,279 $ (12,676 ) $ 73,603 $ 27,345 $ (8,696 ) $ 18,649 Indefinite-lived research and development 1,040 — 1,040 — — — Total intangible assets, net $ 87,319 $ (12,676 ) $ 74,643 $ 27,345 $ (8,696 ) $ 18,649 Definite-Lived Intangible Assets The increase in definite-lived intangible assets during 2020 was primarily due to the acquisition of Allergan in the second quarter of 2020. The intangible assets will be amortized using the estimated pattern of economic benefit. Refer to Note 4 for additional information regarding this acquisition. Amortization expense was $2.1 billion for the three months and $4.0 billion for the nine months ended September 30, 2020 and $389 million for the three months and $1.2 billion for the nine months ended September 30, 2019 . Amortization expense was included in cost of products sold in the condensed consolidated statements of earnings . No definite-lived intangible asset impairment charges were recorded for the nine months ended September 30, 2020 and 2019 . Indefinite-Lived Intangible Assets Indefinite-lived intangible assets represents IPR&D associated with products that have not yet received regulatory approval. The increase in indefinite-lived research and development assets during 2020 was due to the acquisition of Allergan in the second quarter of 2020. Refer to Note 4 for additional information regarding this acquisition. The company performs its annual impairment assessment of indefinite-lived intangible assets in the third quarter, or earlier if impairment indicators exist. No indefinite-lived intangible asset impairment charges were recorded for the nine months ended September 30, 2020 . In the third quarter of 2019, following the announcement of the decision to terminate the rovalpituzumab tesirine (Rova-T) R&D program, the company recorded an impairment charge of $1.0 billion which represented the remaining value of the IPR&D acquired as part of the 2016 Stemcentrx acquisition. |
Integration and Restructuring P
Integration and Restructuring Plans | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Integration and Restructuring Plans | Integration and Restructuring Plans Allergan Integration Plan Following the closing of the Allergan acquisition, AbbVie implemented an integration plan designed to reduce costs, integrate and optimize the combined organization. The integration plan is expected to realize more than $2 billion of expected annual cost synergies over a three-year period, with approximately 50% realized in R&D, 40% in SG&A and 10% in cost of products sold. To achieve these integration objectives, AbbVie expects to incur approximately $2 billion of charges through 2022. These costs will consist of severance and employee benefit costs (cash severance, non-cash severance, including accelerated equity award compensation expense, retention and other termination benefits) and other integration expenses. The following table summarizes the charges associated with the Allergan acquisition integration plan: Three months ended Nine months ended 2020 2020 (in millions) Severance and employee benefits Other integration Severance and employee benefits Other integration Cost of products sold $ 10 $ 12 $ 43 $ 13 Research and development 40 91 172 135 Selling, general and administrative 29 57 347 155 Total charges $ 79 $ 160 $ 562 $ 303 The following table summarizes the cash activity in the recorded liability associated with the integration plan: Nine months ended 2020 (in millions) Severance and employee benefits Other integration Charges $ 467 $ 303 Payments and other adjustments (178 ) (270 ) Accrued balance as of September 30, 2020 $ 289 $ 33 Other Restructuring AbbVie recorded restructuring charges of $11 million for the three months and $42 million for the nine months ended September 30, 2020 and $22 million for the three months and $208 million for the nine months ended September 30, 2019 . The following table summarizes the cash activity in the restructuring reserve for the nine months ended September 30, 2020 : (in millions) Accrued balance as of December 31, 2019 $ 140 Restructuring charges 40 Payments and other adjustments (87 ) Accrued balance as of September 30, 2020 $ 93 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measures | Financial Instruments and Fair Value Measures Risk Management Policy See Note 11 to the company's Annual Report on Form 10-K for the year ended December 31, 2019 for a summary of AbbVie's risk management policy and use of derivative instruments. Financial Instruments Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity. These contracts, with notional amounts totaling $1.6 billion at September 30, 2020 and $957 million at December 31, 2019 , are designated as cash flow hedges and are recorded at fair value. The durations of these forward exchange contracts were generally less than 18 months . Accumulated gains and losses as of September 30, 2020 are reclassified from accumulated other comprehensive income (loss) (AOCI) and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement. In the third quarter of 2019, the company entered into treasury rate lock agreements with notional amounts totaling $10.0 billion to hedge exposure to variability in future cash flows resulting from changes in interest rates related to the issuance of long-term debt in connection with the acquisition of Allergan. The treasury rate lock agreements were designated as cash flow hedges and recorded at fair value. The agreements were net settled upon issuance of the senior notes in November 2019 and the resulting net gain was recognized in other comprehensive income (loss) . This gain is reclassified to interest expense, net over the term of the related debt. In the fourth quarter of 2019, the company entered into interest rate swap contracts with notional amounts totaling $2.3 billion at September 30, 2020 and December 31, 2019 . The effect of the hedge contracts is to change a floating-rate interest obligation to a fixed rate for that portion of the floating-rate debt. The contracts were designated as cash flow hedges and are recorded at fair value. Realized and unrealized gains or losses are included in AOCI and are reclassified to interest expense, net over the lives of the floating-rate debt. The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are reflected in net foreign exchange gain or loss in the condensed consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. These contracts had notional amounts totaling $8.3 billion at September 30, 2020 and $7.1 billion at December 31, 2019 . The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. The company had foreign currency forward exchange contracts with notional amounts totaling €971 million , £204 million and CHF62 million at September 30, 2020 and December 31, 2019 . The company also had an aggregate principal amount of senior Euro notes designated as net investment hedges of €7.3 billion at September 30, 2020 and €3.6 billion at December 31, 2019 . The company uses the spot method of assessing hedge effectiveness for derivative instruments designated as net investment hedges. Realized and unrealized gains and losses from these hedges are included in AOCI and the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in interest expense, net over the life of the hedging instrument. AbbVie is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $4.8 billion at September 30, 2020 and $10.8 billion at December 31, 2019 . The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount. No amounts are excluded from the assessment of effectiveness for cash flow hedges or fair value hedges. The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets : Fair value – Fair value – (in millions) Balance sheet caption September 30, 2020 December 31, 2019 Balance sheet caption September 30, 2020 December 31, 2019 Foreign currency forward exchange contracts Designated as cash flow hedges Prepaid expenses and other $ — $ 3 Accounts payable and accrued liabilities $ 32 $ 14 Designated as net investment hedges Prepaid expenses and other 14 — Accounts payable and accrued liabilities 3 24 Not designated as hedges Prepaid expenses and other 35 19 Accounts payable and accrued liabilities 35 18 Interest rate swap contracts Designated as cash flow hedges Prepaid expenses and other — — Accounts payable and accrued liabilities 7 — Designated as cash flow hedges Other assets — 3 Other long-term liabilities 33 — Designated as fair value hedges Prepaid expenses and other 14 — Accounts payable and accrued liabilities — 2 Designated as fair value hedges Other assets 157 28 Other long-term liabilities — 74 Total derivatives $ 220 $ 53 $ 110 $ 132 While certain derivatives are subject to netting arrangements with the company’s counterparties, the company does not offset derivative assets and liabilities within the condensed consolidated balance sheets . The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss) : Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Foreign currency forward exchange contracts Designated as cash flow hedges $ (52 ) $ 3 $ (5 ) $ 8 Designated as net investment hedges (56 ) 59 (32 ) 69 Interest rate swap contracts designated as cash flow hedges (1 ) — (53 ) — Treasury rate lock agreements designated as cash flow hedges — 88 — 88 Assuming market rates remain constant through contract maturities, the company expects to reclassify pre-tax losses of $22 million into cost of products sold for foreign currency cash flow hedges, pre-tax losses of $27 million into interest expense, net for interest rate swap cash flow hedges and pre-tax gains of $24 million into interest expense, net for treasury rate lock agreement cash flow hedges during the next 12 months. Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized in other comprehensive income (loss) pre-tax losses of $340 million for the three months and pre-tax losses of $532 million for the nine months ended September 30, 2020 and recognized pre-tax gains of $152 million for the three months and pre-tax gains of $187 million for the nine months ended September 30, 2019 . The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings , including the net gains (losses) reclassified out of AOCI into net earnings . See Note 10 for the amount of net gains (losses) reclassified out of AOCI. Three months ended Nine months ended (in millions) Statement of earnings caption 2020 2019 2020 2019 Foreign currency forward exchange contracts Designated as cash flow hedges Cost of products sold $ 15 $ 42 $ 15 $ 119 Designated as net investment hedges Interest expense, net 3 10 16 19 Not designated as hedges Net foreign exchange loss 31 (55 ) 36 (95 ) Treasury rate lock agreements designated as cash flow hedges Interest expense, net 6 — 18 — Interest rate swap contracts Designated as cash flow hedges Interest expense, net (8 ) — (10 ) — Designated as fair value hedges Interest expense, net 1 78 398 443 Debt designated as hedged item in fair value hedges Interest expense, net (1 ) (78 ) (398 ) (443 ) Fair Value Measures The fair value hierarchy consists of the following three levels: • Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access; • Level 2 – Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and • Level 3 – Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company’s management about the assumptions market participants would use in pricing the asset or liability. The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of September 30, 2020 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets Significant other observable Significant unobservable inputs Assets Cash and equivalents $ 7,890 $ 2,836 $ 5,054 $ — Money market funds and time deposits 11 — 11 — Debt securities 53 — 53 — Equity securities 146 138 8 — Interest rate swap contracts 171 — 171 — Foreign currency contracts 49 — 49 — Total assets $ 8,320 $ 2,974 $ 5,346 $ — Liabilities Interest rate swap contracts $ 40 $ — $ 40 $ — Foreign currency contracts 70 — 70 — Contingent consideration 8,327 — — 8,327 Total liabilities $ 8,437 $ — $ 110 $ 8,327 The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of December 31, 2019 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets Significant other observable Significant unobservable inputs Assets Cash and equivalents $ 39,924 $ 1,542 $ 38,382 $ — Debt securities 3 — 3 — Equity securities 24 24 — — Interest rate swap contracts 31 — 31 — Foreign currency contracts 22 — 22 — Total assets $ 40,004 $ 1,566 $ 38,438 $ — Liabilities Interest rate swap contracts $ 76 $ — $ 76 $ — Foreign currency contracts 56 — 56 — Contingent consideration 7,340 — — 7,340 Total liabilities $ 7,472 $ — $ 132 $ 7,340 Equity securities consist of investments for which the fair values were determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company were valued using observable market inputs including published interest rate curves and both forward and spot prices for foreign currencies. The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs, including the discount rate, estimated probabilities and timing of achieving specified development, regulatory and commercial milestones and the estimated amount of future sales of the acquired products. The potential contingent consideration payments are estimated by applying a probability-weighted expected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments, which are then discounted to present value. Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales. Significant judgment is employed in determining the appropriateness of certain of these inputs. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period. The fair value of the company's contingent consideration liabilities as of September 30, 2020 was calculated using the following significant unobservable inputs: Range Weighted average (a) Discount rate 0.2% - 2.6% 1.5 % Probability of payment for unachieved milestones 16% - 57% 54 % Probability of payment for royalties by indication (b) 16% - 100% 89 % Projected year of payments 2020 - 2034 2027 (a) Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities. (b) Excludes early stage indications with 0% estimated probability of payment and includes approved indications with 100% probability of payment. Excluding approved indications, the estimated probability of payment ranged from 16% to 56% at September 30, 2020 . There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy. The following table presents the changes in fair value of total contingent consideration liabilities which are measured using Level 3 inputs: Nine months ended (in millions) 2020 2019 Beginning balance $ 7,340 $ 4,483 Additions (a) 121 — Change in fair value recognized in net earnings 1,078 2,653 Payments (212 ) (179 ) Ending balance $ 8,327 $ 6,957 (a) Represents contingent consideration liabilities assumed in the Allergan acquisition. The change in fair value recognized in net earnings is recorded in other expense, net in the condensed consolidated statements of earnings . Certain financial instruments are carried at historical cost or some basis other than fair value. The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, 2020 are shown in the table below: Basis of fair value measurement (in millions) Book value Approximate fair value Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Liabilities Short-term borrowings $ 54 $ 54 $ — $ 54 $ — Current portion of long-term debt and finance lease obligations, excluding fair value hedges 4,709 4,732 4,279 453 — Long-term debt and finance lease obligations, excluding fair value hedges 81,972 90,201 88,589 1,612 — Total liabilities $ 86,735 $ 94,987 $ 92,868 $ 2,119 $ — The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2019 are shown in the table below: Basis of fair value measurement (in millions) Book value Approximate fair value Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Liabilities Current portion of long-term debt and finance lease obligations, excluding fair value hedges $ 3,755 $ 3,760 $ 3,753 $ 7 $ — Long-term debt and finance lease obligations, excluding fair value hedges 63,021 66,651 66,631 20 — Total liabilities $ 66,776 $ 70,411 $ 70,384 $ 27 $ — AbbVie also holds investments in equity securities that do not have readily determinable fair values. The company records these investments at cost and remeasures them to fair value based on certain observable price changes or impairment events as they occur. The carrying amount of these investments was $96 million as of September 30, 2020 and $66 million as of December 31, 2019 . No significant cumulative upward or downward adjustments have been recorded for these investments as of September 30, 2020 . Concentrations of Risk Of total net accounts receivable, three U.S. wholesalers accounted for 67% as of September 30, 2020 and 68% as of December 31, 2019 , and substantially all of AbbVie’s net revenues in the United States were to these three wholesalers. Humira (adalimumab) is AbbVie’s single largest product and accounted for approximately 46% of AbbVie’s total net revenues for the nine months ended September 30, 2020 and 58% for the nine months ended September 30, 2019 . Debt and Credit Facilities Allergan-Related Financing In connection with the acquisition of Allergan, in May 2020, the company borrowed $3.0 billion under a $6.0 billion term loan credit agreement, of which $1.0 billion was outstanding under a floating rate three-year term loan tranche and $2.0 billion outstanding under a floating rate five-year term loan tranche as of September 30, 2020 . Subsequent to these borrowings, AbbVie terminated the unused commitments of the lenders under the term loan. In May 2020, AbbVie completed its previously announced offers to exchange any and all outstanding notes of certain series issued by Allergan for new notes to be issued by AbbVie and cash. Following the settlement of the exchange offers, AbbVie issued $14.0 billion and €3.1 billion of new notes in exchange for the Allergan notes tendered in the exchange offers. The aggregate principal amount of Allergan notes that remained outstanding following the settlement of the exchange offers was approximately $1.5 billion and €635 million . The exchange transaction was accounted for as a modification of the assumed debt instruments. In September 2020, the company repaid $650 million aggregate principal amount of 3.375% Allergan exchange notes at maturity. The following table summarizes acquired debt outstanding as of September 30, 2020 : (dollars in millions) September 30, 2020 Senior USD notes 4.875% Senior Notes due 2021 $ 450 5.000% Senior Notes due 2021 1,200 3.450% Senior Notes due 2022 2,878 3.250% Senior Notes due 2022 1,700 2.800% Senior Notes due 2023 350 3.850% Senior Notes due 2024 1,032 3.800% Senior Notes due 2025 3,021 4.550% Senior Notes due 2035 1,789 4.625% Senior Notes due 2042 457 4.850% Senior Notes due 2044 1,074 4.750% Senior Notes due 2045 881 Senior Euro notes Floating Rate Notes due 2020 (€700 principal) 821 0.500% Senior Notes due 2021 (€750 principal) 879 1.500% Senior Notes due 2023 (€500 principal) 586 1.250% Senior Notes due 2024 (€700 principal) 821 2.625% Senior Notes due 2028 (€500 principal) 586 2.125% Senior Notes due 2029 (€550 principal) 645 Unamortized purchase price adjustments of Allergan debt 1,256 Total acquired debt outstanding $ 20,426 Other Long-Term Debt In May 2020, the company repaid $3.8 billion aggregate principal amount of 2.5% senior notes at maturity. In September 2019, the company issued €1.4 billion aggregate principal amount of unsecured senior Euro notes, consisting of €750 million aggregate principal amount of 0.75% senior notes due 2027 and €650 million aggregate principal amount of 1.25% senior notes due 2031. Short-Term Borrowings There were no commercial paper borrowings outstanding as of September 30, 2020 and December 31, 2019 . The weighted-average interest rate on commercial paper borrowings was 1.8% for the nine months ended September 30, 2020 and 2.5% for the nine months ended September 30, 2019 . In March 2019, AbbVie repaid its $3.0 billion 364 -day term loan credit agreement that was scheduled to mature in June 2019 . |
Post-Employment Benefits
Post-Employment Benefits | 9 Months Ended |
Sep. 30, 2020 | |
Postemployment Benefits [Abstract] | |
Post-Employment Benefits | Post-Employment Benefits The following table summarizes net periodic benefit cost relating to the company’s defined benefit and other post-employment plans: Defined Other post- Three months ended Nine months ended Three months ended Nine months ended (in millions) 2020 2019 2020 2019 2020 2019 2020 2019 Service cost $ 93 $ 67 $ 277 $ 202 $ 10 $ 6 $ 31 $ 19 Interest cost 68 64 196 194 8 6 25 21 Expected return on plan assets (148 ) (118 ) (426 ) (356 ) — — — — Amortization of actuarial losses and prior service cost 57 27 171 82 7 1 17 1 Net periodic benefit cost $ 70 $ 40 $ 218 $ 122 $ 25 $ 13 $ 73 $ 41 In connection with the Allergan acquisition, AbbVie assumed certain post-employment benefit obligations which were recorded at fair value. Upon acquisition in the second quarter of 2020, the excess of projected benefit obligations over the plan assets was recognized as a liability totaling $156 million . The components of net periodic benefit cost other than service cost are included in other expense, net in the condensed consolidated statements of earnings . |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Stock-Based Compensation Stock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and is summarized as follows: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Cost of products sold $ 11 $ 4 $ 37 $ 24 Research and development 54 31 200 136 Selling, general and administrative 97 40 380 191 Pre-tax compensation expense 162 75 617 351 Tax benefit 32 15 109 64 After-tax compensation expense $ 130 $ 60 $ 508 $ 287 Stock Options During the nine months ended September 30, 2020 , primarily in connection with the company's annual grant, AbbVie granted 2.0 million stock options with a weighted-average grant-date fair value of $12.14 . In connection with the Allergan acquisition, during the second quarter of 2020, AbbVie issued 11.2 million stock options to holders of Allergan options as a result of the conversion of such options. These options were fair-valued using a lattice valuation model. Refer to Note 4 for additional information regarding the Allergan acquisition. As of September 30, 2020 , $16 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years . RSUs and Performance Shares During the nine months ended September 30, 2020 , primarily in connection with the company's annual grant, AbbVie granted 5.5 million RSUs and performance shares with a weighted-average grant-date fair value of $93.50 . In connection with the Allergan acquisition, during the second quarter of 2020, AbbVie issued 8.2 million RSUs to holders of Allergan equity awards based on a conversion factor described in the transaction agreement. Refer to Note 4 for additional information regarding the Allergan acquisition. As of September 30, 2020 , $713 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years . Cash Dividends The following table summarizes quarterly cash dividends declared during 2020 and 2019 : 2020 2019 Date Declared Payment Date Dividend Per Share Date Declared Payment Date Dividend Per Share 10/30/20 02/16/21 $ 1.30 11/01/19 02/14/20 $ 1.18 09/11/20 11/16/20 $ 1.18 09/06/19 11/15/19 $ 1.07 06/17/20 08/14/20 $ 1.18 06/20/19 08/15/19 $ 1.07 02/20/20 05/15/20 $ 1.18 02/21/19 05/15/19 $ 1.07 Stock Repurchase Program The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management's discretion. The program has no time limit and can be discontinued at any time. Shares repurchased under this program are recorded at acquisition cost, including related expenses, and are available for general corporate purposes. Under this authorization, AbbVie repurchased 6 million shares for $500 million during the nine months ended September 30, 2020 and 4 million shares for $300 million during the nine months ended September 30, 2019 . AbbVie's remaining stock repurchase authorization was approximately $3.5 billion as of September 30, 2020 . Accumulated Other Comprehensive Loss The following table summarizes the changes in each component of accumulated other comprehensive loss , net of tax, for the nine months ended September 30, 2020 : (in millions) Foreign currency Net investment hedging activities Pension and post-employment Cash flow hedging Total Balance as of December 31, 2019 $ (928 ) $ 9 $ (2,965 ) $ 288 $ (3,596 ) Other comprehensive income (loss) before reclassifications 726 (443 ) (14 ) (49 ) 220 Net losses (gains) reclassified from accumulated other comprehensive loss — (12 ) 148 (19 ) 117 Net current-period other comprehensive income (loss) 726 (455 ) 134 (68 ) 337 Balance as of September 30, 2020 $ (202 ) $ (446 ) $ (2,831 ) $ 220 $ (3,259 ) Other comprehensive income for the nine months ended September 30, 2020 included foreign currency translation adjustments totaling a gain of $726 million , which was principally due to the impact of the strengthening of the Euro on the translation of the company’s Euro-denominated assets. The following table summarizes the changes in each component of accumulated other comprehensive loss , net of tax, for the nine months ended September 30, 2019 : (in millions) Foreign currency Net investment hedging activities Pension and post- Marketable security activities Cash flow hedging Total Balance as of December 31, 2018 $ (830 ) $ (65 ) $ (1,722 ) $ (10 ) $ 147 $ (2,480 ) Other comprehensive income (loss) before reclassifications (288 ) 199 12 12 77 12 Net losses (gains) reclassified from accumulated other comprehensive loss — (15 ) 66 (2 ) (109 ) (60 ) Net current-period other comprehensive income (loss) (288 ) 184 78 10 (32 ) (48 ) Balance as of September 30, 2019 $ (1,118 ) $ 119 $ (1,644 ) $ — $ 115 $ (2,528 ) Other comprehensive loss for the nine months ended September 30, 2019 included foreign currency translation adjustments totaling a loss of $288 million , which was principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets. The following table presents the impact on AbbVie’s condensed consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss : Three months ended Nine months ended (in millions) (brackets denote gains) 2020 2019 2020 2019 Net investment hedging activities Gains on derivative amount excluded from effectiveness testing (a) $ (3 ) $ (10 ) $ (16 ) $ (19 ) Tax expense 1 2 4 4 Total reclassifications, net of tax $ (2 ) $ (8 ) $ (12 ) $ (15 ) Pension and post-employment benefits Amortization of actuarial losses and other (b) $ 63 $ 28 $ 188 $ 83 Tax benefit (13 ) (5 ) (40 ) (17 ) Total reclassifications, net of tax $ 50 $ 23 $ 148 $ 66 Cash flow hedging activities Gains on foreign currency forward exchange contracts (c) $ (15 ) $ (42 ) $ (15 ) $ (119 ) Gains on treasury rate lock agreements (a) (6 ) — (18 ) — Losses on interest rate swap contracts (a) 8 — 10 — Tax expense 3 3 4 10 Total reclassifications, net of tax $ (10 ) $ (39 ) $ (19 ) $ (109 ) (a) Amounts are included in interest expense, net (see Note 8 ). (b) Amounts are included in the computation of net periodic benefit cost (see Note 9 ). (c) Amounts are included in cost of products sold (see Note 8 ). |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate was 7% for the three and nine months ended September 30, 2020 and 6% for the three months and 5% for the nine months ended September 30, 2019 . The effective tax rate in each period differed from the U.S. statutory tax rate of 21% principally due to the benefit from foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax incentives in Puerto Rico and other foreign tax jurisdictions and business development activities. The increase in the effective tax rate for the three and nine months ended September 30, 2020 over the prior year was principally due to the unfavorable impact of non-deductible Allergan acquisition related costs, the impact of changes in contingent consideration liabilities, collaboration related costs and changes in the company's taxable earnings among jurisdictions. Due to the potential for resolution of federal, state and foreign examinations and the expiration of various statutes of limitations, it is reasonably possible that the company’s gross unrecognized tax benefits balance may change within the next 12 months by up to $138 million . |
Legal Proceedings and Contingen
Legal Proceedings and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Contingencies | Legal Proceedings and Contingencies AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. The recorded accrual balance for litigation was approximately $70 million as of September 30, 2020 and $290 million as of December 31, 2019 . Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows. Subject to certain exceptions specified in the separation agreement by and between Abbott Laboratories (Abbott) and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters. Antitrust Litigation Lawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan entered into between Kos Pharmaceuticals, Inc. (a company acquired by Abbott in 2006 and presently a subsidiary of AbbVie) and a generic company violates federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. The lawsuits pending in federal court consist of four individual plaintiff lawsuits and two consolidated purported class actions: one brought by Niaspan direct purchasers and one brought by Niaspan end-payers. The cases are pending in the United States District Court for the Eastern District of Pennsylvania for coordinated or consolidated pre-trial proceedings under the MDL Rules as In re: Niaspan Antitrust Litigation , MDL No. 2460. In August 2019, the court certified a class of direct purchasers of Niaspan. In June 2020, the court denied the end-payers' motion to certify a class. In October 2016, the Orange County, California District Attorney’s Office filed a lawsuit on behalf of the State of California regarding the Niaspan patent litigation settlement in Orange County Superior Court, asserting a claim under the unfair competition provision of the California Business and Professions Code seeking injunctive relief, restitution, civil penalties and attorneys’ fees. In September 2014, the Federal Trade Commission filed a lawsuit, FTC v. AbbVie Inc., et al. , against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, alleging that 2011 patent litigation with two generic companies regarding AndroGel was sham litigation and the settlements of that litigation violated federal antitrust law. In May 2015, the court dismissed the FTC’s settlement-related claim. In June 2018, following a bench trial, the court found for the FTC on its sham litigation claim and ordered a disgorgement remedy of $448 million , plus prejudgment interest. The court denied the FTC’s request for injunctive relief. In September 2020, the United States Court of Appeals for the Third Circuit reversed the district court’s finding of sham litigation with respect to one generic company and affirmed with respect to the other but held the FTC lacked authority to obtain a disgorgement remedy and vacated the district court’s award. The Third Circuit also affirmed the district court’s denial of the FTC’s injunction request and reinstated the FTC’s settlement-related claim for further proceedings in the district court. In August 2019, direct purchasers of AndroGel filed a lawsuit, King Drug Co. of Florence, Inc., et al. v. AbbVie Inc., et al. , against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, alleging that 2006 patent litigation settlements and related agreements by Solvay Pharmaceuticals, Inc. (a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) with three generic companies violated federal antitrust law, and also making allegations similar to those in FTC v. AbbVie Inc. (above). In May 2020, Perrigo Company and related entities filed a lawsuit against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, making sham litigation allegations similar to those in FTC v. AbbVie Inc . (above). In July 2019, the New Mexico Attorney General filed a lawsuit, State of New Mexico ex rel. Balderas v. AbbVie Inc., et al. , in New Mexico District Court for Santa Fe County against AbbVie and other companies alleging their marketing of AndroGel violated New Mexico’s Unfair Practices Act. In October 2020, the state added a claim under the New Mexico False Advertising Act. Between March and May 2019, 12 putative class action lawsuits were filed in the United States District Court for the Northern District of Illinois by indirect Humira purchasers, alleging that AbbVie’s settlements with biosimilar manufacturers and AbbVie’s Humira patent portfolio violated state and federal antitrust laws. The court consolidated these lawsuits as In re: Humira (Adalimumab) Antitrust Litigation . In June 2020, the court dismissed the consolidated litigation with prejudice. The plaintiffs have appealed the dismissal. Lawsuits are pending against Forest Laboratories, LLC and others generally alleging that 2009 and 2010 patent litigation settlements involving Namenda entered into between Forest and generic companies and other conduct by Forest involving Namenda, violated state antitrust, unfair and deceptive trade practices, and unjust enrichment laws. Plaintiffs generally seek monetary damages, injunctive relief and attorneys’ fees. The lawsuits, purported class actions filed by indirect purchasers of Namenda, are consolidated as In re: Namenda Indirect Purchaser Antitrust Litigation in the United States District Court for the Southern District of New York. Lawsuits are pending against Allergan Inc. generally alleging that Allergan’s petitioning to the U.S. Patent Office and Food and Drug Administration and other conduct by Allergan involving Restasis violated federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages, injunctive relief and attorneys’ fees. The lawsuits, certified as a class action filed on behalf of indirect purchasers of Restasis, are consolidated for pre-trial purposes in the United States District Court for the Eastern District of New York under the MDL Rules as In re: Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litigation , MDL No. 2819. The settlement of similar lawsuits brought on behalf of a class of direct purchasers of Restasis received final court approval in October 2020. Government Proceedings Lawsuits are pending against Allergan and several other manufacturers generally alleging that they improperly promoted and sold prescription opioid products. Approximately 3,050 matters are pending against Allergan. The federal court cases are consolidated for pre-trial purposes in the United States District Court for the Northern District of Ohio under the MDL rules as In re: National Prescription Opiate Litigation , MDL No. 2804. Approximately 279 of the claims are pending in various state courts. The plaintiffs in these cases, which include states, counties, cities, and Native American tribes, generally seek compensatory damages. Shareholder and Securities Litigation In June 2016, a lawsuit, Elliott Associates, L.P., et al. v. AbbVie Inc. , was filed by five investment funds against AbbVie in the Cook County, Illinois Circuit Court alleging that AbbVie made misrepresentations and omissions in connec tion with its proposed t ransaction with Shire. Similar lawsuits were filed between July 2017 and October 2019 against AbbVie and in some instances its chief executive officer in the same court by additional investment funds. The court granted motions dismissing the claims of three plaintiffs, one of which refiled its lawsuit in New York state court in June 2020 while the appeal of its dismissal in Illinois is pending. Plaintiffs seek compensatory and punitive damages. In October 2018, a federal securities lawsuit, Holwill v. AbbVie Inc., et al ., was filed in the United States District Court for the Northern District of Illinois) against AbbVie, its chief executive officer and former chief financial officer, alleging that reasons stated for Humira sales growth in financial filings between 2013 and 2017 were misleading because they omitted alleged misconduct in connection with Humira patient and reimbursement support services and other services and items of value that allegedly induced Humira prescriptions. In February 2020, a shareholder derivative lawsuit, Elfers v. Gonzalez, et al. , was filed in the United States District Court for the District of Delaware alleging that certain AbbVie directors and officers breached their fiduciary duties regarding alleged misconduct in connection with Humira patient and reimbursement support services and other services and items of value and in connection with the announcements of results of AbbVie’s 2018 Dutch auction tender offer. Lawsuits are pending against Allergan and certain of its current and former officers alleging they made misrepresentations and omissions regarding Allergan's textured breast implants. The lawsuits, which were filed by Allergan shareholders, have been consolidated in the United States District Court for the Southern District of New York as In re: Allergan plc Securities Litigation . The plaintiffs generally seek compensatory damages and attorneys’ fees. In September 2019, the court partially granted Allergan's motion to dismiss. In September 2020, the court denied plaintiffs’ class certification motion because it found the lead plaintiff to be an inadequate representative of the proposed class but allowed 30 days for another putative class member to propose itself as a new lead plaintiff. Lawsuits are pending against Allergan and certain of its current and former officers alleging they made misrepresentations and omissions regarding Allergan’s former Actavis generics unit and its alleged anticompetitive conduct with other generic drug companies. The lawsuits were filed by Allergan shareholders and consist of three purported class actions and one individual action that have been consolidated in the U.S. District Court for the District of New Jersey as In re: Allergan Generic Drug Pricing Securities Litigation . Another individual action in New Jersey state court was dismissed in September 2020. The plaintiffs seek monetary damages and attorneys’ fees. Product Liability and General Litigation Product liability cases were filed generally alleging that AbbVie and other manufacturers of testosterone replacement therapy products did not adequately warn about risks of certain injuries, primarily heart attacks, strokes and blood clots. Approximately 3,500 claims against AbbVie regarding AndroGel were consolidated for pre-trial purposes in the United States District Court for the Northern District of Illinois under the MDL Rules as In re: Testosterone Replacement Therapy Products Liability Litigation , MDL No. 2545. Approximately 175 claims against AbbVie are pending in various state courts. All but five of the pending filed cases have been, or are in the process of being, dismissed pursuant to a Master Settlement Agreement. Product liability cases are pending in which plaintiffs generally allege that AbbVie did not adequately warn about risk of certain injuries, primarily various birth defects, arising from use of Depakote. Approximately 120 cases are pending in the United States District Court for the Southern District of Illinois, and approximately 4 others are pending in various federal and state courts. Plaintiffs generally seek compensatory and punitive damages. Approximately ninety-five percent of these pending cases, plus other unfiled claims, are subject to confidential settlement agreements and are expected to be dismissed with prejudice. In 2018, a qui tam lawsuit, U.S. ex rel. Silbersher v. Allergan Inc., et al. , was filed in the United States District Court for the Northern District of California against several Allergan entities and others, alleging that their conduct before the U.S. Patent Office resulted in false claims for payment being made to federal and state healthcare payors for Namenda XR and Namzaric. The plaintiff-relator seeks damages and attorneys' fees under the federal False Claims Act and state law analogues. The federal government and state governments declined to intervene in the lawsuit. Intellectual Property Litigation Pharmacyclics LLC, a wholly owned subsidiary of AbbVie, is seeking to enforce its patent rights relating to ibrutinib capsules (a drug Pharmacyclics sells under the trademark Imbruvica). In February 2018 and March 2020, cases were filed in the United States District Court for the District of Delaware against Sandoz Inc. and Lek Pharmaceuticals D.D. In each case, Pharmacyclics alleges the defendants' proposed generic ibrutinib product infringes certain Pharmacyclics patents and seeks declaratory and injunctive relief. Janssen Biotech, Inc. which is in a global collaboration with Pharmacyclics concerning the development and marketing of Imbruvica, is the co-plaintiff in these suits. Pharmacyclics LLC, a wholly owned subsidiary of AbbVie, is seeking to enforce its patent rights relating to ibrutinib tablets (a drug Pharmacyclics sells under the trademark Imbruvica). Cases were filed in the United States District Court for the District of Delaware in March 2019 and March 2020 against Alvogen Pine Brook LLC and Natco Pharma Ltd., and in April 2020 against Zydus Worldwide DMCC and Cadila Healthcare Limited. In each case, Pharmacyclics alleges defendants’ proposed generic ibrutinib tablet product infringes certain Pharmacyclics patents and seeks declaratory and injunctive relief. Janssen Biotech, Inc. which is in a global collaboration with Pharmacyclics concerning the development and marketing of Imbruvica, is the co-plaintiff in these suits. Allergan USA, Inc., Allergan Sales, LLC, and Forest Laboratories Holdings Limited, wholly owned subsidiaries of AbbVie, are seeking to enforce patent rights relating to cariprazine (a drug sold under the trademark Vraylar). Litigation was filed in the United States District Court for the District of Delaware in December 2019 against Sun Pharmaceutical Industries Limited and Sun Pharma Global FZE; Aurobindo Pharma Limited and Aurobindo Pharma USA, Inc.; and Zydus Pharmaceuticals (USA), Inc. and Cadila Healthcare Limited. Allergan alleges defendants' proposed generic cariprazine products infringe certain patents and seeks declaratory and injunctive relief. Gedeon Richter Plc, Inc. which is in a global collaboration with Allergan concerning the development and marketing of Vraylar, is the co-plaintiff in this suit. In January 2019, Allergan, Inc. and Allergan plc (now Allergan Limited) and Medytox Inc. (collectively, "Complainants") filed a complaint with the United States International Trade Commission (ITC) against Daewoong Pharmaceuticals Co., Ltd., Daewoong Co., Ltd., and Evolus Inc. (collectively, "Respondents") requesting the ITC commence an investigation regarding the importation into the United States of Respondents' botulinum neurotoxin products, including Jeuveau, which Complainants assert were developed using Medytox's trade secrets. Complainants seek permanent exclusion and cease and desist orders covering Respondents' products, including Jeuveau. In July 2020, the administrative law judge issued an initial ruling in favor of Allergan and Medytox. In September 2020, the full commission decided to review the initial ruling. In August 2020, BTL Industries, Inc. (BTL) filed an ITC action against Allergan USA, Inc., Allergan Limited, Allergan, Inc., Zeltiq Aesthetics, Inc., Zeltiq Ireland Unlimited Company, and Zimmer Medizinsysteme GmbH, for patent infringement alleging that the CoolTone and CoolSculpting devices infringe its patents and seeking an exclusion order preventing importation of the devices and any components used to make or use the devices. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information AbbVie operates as a single global business segment dedicated to the research and development, manufacturing, commercialization and sale of innovative medicines and therapies. This operating structure enables the Chief Executive Officer, as chief operating decision maker (CODM), to allocate resources and assess business performance on a global basis in order to achieve established long-term strategic goals. Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, manufacturing and supply of products. Commercial efforts that coordinate the marketing, sales and distribution of these products are organized by geographic region or therapeutic area. All of these activities are supported by a global corporate administrative staff. The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the CODM for purposes of assessing performance, allocating resources and planning and forecasting future periods. The following table details AbbVie’s worldwide net revenues: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Immunology Humira United States $ 4,189 $ 3,887 $ 11,819 $ 10,895 International 951 1,049 2,861 3,357 Total $ 5,140 $ 4,936 $ 14,680 $ 14,252 Skyrizi United States $ 379 $ 76 $ 934 $ 118 International 56 15 131 21 Total $ 435 $ 91 $ 1,065 $ 139 Rinvoq United States $ 191 $ 14 $ 409 $ 14 International 24 — 41 — Total $ 215 $ 14 $ 450 $ 14 Hematologic Oncology Imbruvica United States $ 1,119 $ 1,042 $ 3,140 $ 2,757 Collaboration revenues 251 215 750 621 Total $ 1,370 $ 1,257 $ 3,890 $ 3,378 Venclexta United States $ 204 $ 142 $ 596 $ 364 International 148 79 376 177 Total $ 352 $ 221 $ 972 $ 541 Aesthetics Botox Cosmetic (a) United States $ 237 $ — $ 384 $ — International 156 — 235 — Total $ 393 $ — $ 619 $ — Juvederm Collection (a) United States $ 115 $ — $ 171 $ — International 159 — 216 — Total $ 274 $ — $ 387 $ — Other Aesthetics (a) United States $ 265 $ — $ 392 $ — International 35 — 50 — Total $ 300 $ — $ 442 $ — Neuroscience Botox Therapeutic (a) United States $ 429 $ — $ 683 $ — International 94 — 137 — Total $ 523 $ — $ 820 $ — Vraylar (a) United States $ 358 $ — $ 550 $ — Duodopa United States $ 25 $ 26 $ 75 $ 72 International 98 91 290 271 Total $ 123 $ 117 $ 365 $ 343 Ubrelvy (a) United States $ 38 $ — $ 60 $ — Other Neuroscience (a) United States $ 203 $ — $ 306 $ — International 4 — 6 — Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Total $ 207 $ — $ 312 $ — Eye Care Lumigan/Ganfort (a) United States $ 62 $ — $ 97 $ — International 87 — 128 — Total $ 149 $ — $ 225 $ — Alphagan/Combigan (a) United States $ 84 $ — $ 131 $ — International 39 — 61 — Total $ 123 $ — $ 192 $ — Restasis (a) United States $ 284 $ — $ 422 $ — International 15 — 21 — Total $ 299 $ — $ 443 $ — Other Eye Care (a) United States $ 119 $ — $ 173 $ — International 150 — 224 — Total $ 269 $ — $ 397 $ — Women's Health Lo Loestrin (a) United States $ 129 $ — $ 207 $ — International 5 — 7 — Total $ 134 $ — $ 214 $ — Orilissa/Oriahnn United States $ 24 $ 27 $ 84 $ 58 International 1 — 3 1 Total $ 25 $ 27 $ 87 $ 59 Other Women's Health (a) United States $ 74 $ — $ 108 $ — International 6 — 8 — Total $ 80 $ — $ 116 $ — Other Key Products Mavyret United States $ 185 $ 368 $ 565 $ 1,167 International 229 327 784 1,098 Total $ 414 $ 695 $ 1,349 $ 2,265 Creon United States $ 282 $ 265 $ 810 $ 749 Lupron United States $ 99 $ 187 $ 461 $ 546 International 34 43 110 122 Total $ 133 $ 230 $ 571 $ 668 Linzess/Constella (a) United States $ 240 $ — $ 370 $ — International 8 — 11 — Total $ 248 $ — $ 381 $ — Synthroid United States $ 189 $ 197 $ 577 $ 582 All other $ 829 $ 429 $ 1,972 $ 1,572 Total net revenues $ 12,902 $ 8,479 $ 31,946 $ 24,562 (a) Net revenues for the nine months ended September 30, 2020 include product revenues for Allergan products only from May 8, 2020, which was the acquisition closing date, through September 30, 2020 . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU No. 2016-13 In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326) . The standard changes how credit losses are measured for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, the standard requires the use of a new forward-looking "expected credit loss" model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. AbbVie adopted the standard in the first quarter of 2020. The adoption did not have a material impact on the company's consolidated financial statements. Upon adoption of the standard, accounts receivable are stated at amortized cost less allowance for credit losses. The allowance for credit losses reflects the best estimate of future losses over the contractual life of outstanding accounts receivable and is determined on the basis of historical experience, specific allowances for known troubled accounts, other currently available information including customer financial condition, and both current and forecasted economic conditions. There were no significant changes in credit loss risk factors that impacted the company's recorded allowance during the nine months ended September 30, 2020 . Recent Accounting Pronouncements Not Yet Adopted ASU No. 2019-12 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) . The standard includes simplifications related to accounting for income taxes including removing certain exceptions related to the approach for intraperiod tax allocation and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard will be effective for AbbVie starting with the first quarter of 2021. AbbVie is currently assessing the impact of adopting this guidance but does not expect a material impact on its consolidated financial statements. |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Financial Information | |
Schedule of interest expense, net | Interest Expense, Net Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Interest expense $ 630 $ 480 $ 1,825 $ 1,225 Interest income (10 ) (60 ) (163 ) (171 ) Interest expense, net $ 620 $ 420 $ 1,662 $ 1,054 |
Schedule of inventories | Inventories (in millions) September 30, 2020 December 31, 2019 Finished goods $ 1,444 $ 485 Work-in-process 1,295 942 Raw materials 735 386 Inventories $ 3,474 $ 1,813 |
Schedule of property and equipment | Property and Equipment (in millions) September 30, 2020 December 31, 2019 Property and equipment, gross $ 10,391 $ 8,188 Accumulated depreciation (5,405 ) (5,226 ) Property and equipment, net $ 4,986 $ 2,962 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share, impact of two-class method | The following table summarizes the impact of the two-class method: Three months ended Nine months ended (in millions, except per share data) 2020 2019 2020 2019 Basic EPS Net earnings attributable to AbbVie Inc. $ 2,308 $ 1,884 $ 4,580 $ 5,081 Earnings allocated to participating securities 17 10 44 27 Earnings available to common shareholders $ 2,291 $ 1,874 $ 4,536 $ 5,054 Weighted-average basic shares outstanding 1,769 1,481 1,633 1,480 Basic earnings per share attributable to AbbVie Inc. $ 1.30 $ 1.27 $ 2.78 $ 3.41 Diluted EPS Net earnings attributable to AbbVie Inc. $ 2,308 $ 1,884 $ 4,580 $ 5,081 Earnings allocated to participating securities 17 10 44 27 Earnings available to common shareholders $ 2,291 $ 1,874 $ 4,536 $ 5,054 Weighted-average shares of common stock outstanding 1,769 1,481 1,633 1,480 Effect of dilutive securities 5 2 4 3 Weighted-average diluted shares outstanding 1,774 1,483 1,637 1,483 Diluted earnings per share attributable to AbbVie Inc. $ 1.29 $ 1.26 $ 2.77 $ 3.41 |
Licensing, Acquisitions, and _2
Licensing, Acquisitions, and Other Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Licensing, Acquisitions, and Other Arrangements | |
Schedule of consideration for the acquisition of Allergan | Total consideration for the acquisition of Allergan is summarized as follows: (in millions) Cash consideration paid to Allergan shareholders (a) $ 39,675 Fair value of AbbVie common stock issued to Allergan shareholders (b) 23,979 Fair value of AbbVie equity awards issued to Allergan equity award holders (c) 430 Total consideration $ 64,084 (a) Represents cash consideration transferred of $120.30 per outstanding Allergan ordinary share based on 330 million Allergan ordinary shares outstanding at closing. (b) Represents the acquisition date fair value of 286 million shares of AbbVie common stock issued to Allergan shareholders based on the exchange ratio of 0.8660 AbbVie shares for each outstanding Allergan ordinary share at the May 8, 2020 closing price of $83.96 per share. (c) Represents the pre-acquisition service portion of the fair value of 11 million AbbVie stock options and 8 million RSUs issued to Allergan equity award holders. |
Schedule of fair value of assets acquired and liabilities assumed | The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash and equivalents $ 1,537 Short-term investments 1,421 Accounts receivable 2,423 Inventories 2,340 Prepaid expenses and other current assets 1,984 Investments 137 Property and equipment 1,912 Intangible assets Developed product rights 58,280 In-process research and development 1,040 Other noncurrent assets 1,452 Short-term borrowings (60 ) Current portion of long-term debt and finance lease obligations (1,899 ) Accounts payable and accrued liabilities (5,813 ) Long-term debt and finance lease obligations (18,937 ) Deferred income taxes (4,068 ) Other long-term liabilities (4,728 ) Total identifiable net assets 37,021 Goodwill 27,063 Total assets acquired and liabilities assumed $ 64,084 |
Schedule of unaudited pro forma combined results | The following table presents the unaudited pro forma combined results of AbbVie and Allergan for the three and nine months ended September 30, 2020 and 2019 as if the acquisition of Allergan had occurred on January 1, 2019: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Net revenues $ 12,902 $ 12,428 $ 36,663 $ 36,085 Net earnings (loss) 2,829 977 6,142 (2,615 ) |
Collaborations (Tables)
Collaborations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Janssen Biotech Inc. | |
Collaborative and license agreements | |
Schedule of profit and cost sharing relationship | The following table shows the profit and cost sharing relationship between Janssen and AbbVie: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 United States - Janssen's share of profits (included in cost of products sold) $ 524 $ 489 $ 1,467 $ 1,297 International - AbbVie's share of profits (included in net revenues) 251 215 750 621 Global - AbbVie's share of other costs (included in respective line items) 74 81 211 230 |
Genentech, Inc. | |
Collaborative and license agreements | |
Schedule of profit and cost sharing relationship | The following table shows the profit and cost sharing relationship between Genentech and AbbVie: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Genentech's share of profits, including royalties (included in cost of products sold) $ 139 $ 89 $ 390 $ 220 AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A) 9 9 34 27 AbbVie's share of development costs (included in R&D) 27 32 88 94 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in the carrying amount of goodwill | The following table summarizes the changes in the carrying amount of goodwill: (in millions) Balance as of December 31, 2019 $ 15,604 Additions (a) 27,063 Foreign currency translation adjustments 134 Balance as of September 30, 2020 $ 42,801 (a) Goodwill additions related to the acquisition of Allergan in the second quarter of 2020 (see Note 4 ). |
Summary of definite-lived intangible assets | The following table summarizes intangible assets: September 30, 2020 December 31, 2019 (in millions) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets Developed product rights $ 78,451 $ (9,917 ) $ 68,534 $ 19,547 $ (6,405 ) $ 13,142 License agreements 7,828 (2,759 ) 5,069 7,798 (2,291 ) 5,507 Total definite-lived intangible assets $ 86,279 $ (12,676 ) $ 73,603 $ 27,345 $ (8,696 ) $ 18,649 Indefinite-lived research and development 1,040 — 1,040 — — — Total intangible assets, net $ 87,319 $ (12,676 ) $ 74,643 $ 27,345 $ (8,696 ) $ 18,649 |
Summary of indefinite-lived intangible assets | The following table summarizes intangible assets: September 30, 2020 December 31, 2019 (in millions) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets Developed product rights $ 78,451 $ (9,917 ) $ 68,534 $ 19,547 $ (6,405 ) $ 13,142 License agreements 7,828 (2,759 ) 5,069 7,798 (2,291 ) 5,507 Total definite-lived intangible assets $ 86,279 $ (12,676 ) $ 73,603 $ 27,345 $ (8,696 ) $ 18,649 Indefinite-lived research and development 1,040 — 1,040 — — — Total intangible assets, net $ 87,319 $ (12,676 ) $ 74,643 $ 27,345 $ (8,696 ) $ 18,649 |
Integration and Restructuring_2
Integration and Restructuring Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Allergan integration plan | |
Restructuring charges | |
Summary of charges associated with integration plan | The following table summarizes the charges associated with the Allergan acquisition integration plan: Three months ended Nine months ended 2020 2020 (in millions) Severance and employee benefits Other integration Severance and employee benefits Other integration Cost of products sold $ 10 $ 12 $ 43 $ 13 Research and development 40 91 172 135 Selling, general and administrative 29 57 347 155 Total charges $ 79 $ 160 $ 562 $ 303 |
Summary of cash activity in the restructuring reserve | The following table summarizes the cash activity in the recorded liability associated with the integration plan: Nine months ended 2020 (in millions) Severance and employee benefits Other integration Charges $ 467 $ 303 Payments and other adjustments (178 ) (270 ) Accrued balance as of September 30, 2020 $ 289 $ 33 |
Other restructuring | |
Restructuring charges | |
Summary of cash activity in the restructuring reserve | The following table summarizes the cash activity in the restructuring reserve for the nine months ended September 30, 2020 : (in millions) Accrued balance as of December 31, 2019 $ 140 Restructuring charges 40 Payments and other adjustments (87 ) Accrued balance as of September 30, 2020 $ 93 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of amounts and location of derivatives on the condensed consolidated balance sheets | The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets : Fair value – Fair value – (in millions) Balance sheet caption September 30, 2020 December 31, 2019 Balance sheet caption September 30, 2020 December 31, 2019 Foreign currency forward exchange contracts Designated as cash flow hedges Prepaid expenses and other $ — $ 3 Accounts payable and accrued liabilities $ 32 $ 14 Designated as net investment hedges Prepaid expenses and other 14 — Accounts payable and accrued liabilities 3 24 Not designated as hedges Prepaid expenses and other 35 19 Accounts payable and accrued liabilities 35 18 Interest rate swap contracts Designated as cash flow hedges Prepaid expenses and other — — Accounts payable and accrued liabilities 7 — Designated as cash flow hedges Other assets — 3 Other long-term liabilities 33 — Designated as fair value hedges Prepaid expenses and other 14 — Accounts payable and accrued liabilities — 2 Designated as fair value hedges Other assets 157 28 Other long-term liabilities — 74 Total derivatives $ 220 $ 53 $ 110 $ 132 |
Schedule of pre-tax amounts of derivatives designated as cash flow hedges recognized in other comprehensive income (loss) | The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss) : Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Foreign currency forward exchange contracts Designated as cash flow hedges $ (52 ) $ 3 $ (5 ) $ 8 Designated as net investment hedges (56 ) 59 (32 ) 69 Interest rate swap contracts designated as cash flow hedges (1 ) — (53 ) — Treasury rate lock agreements designated as cash flow hedges — 88 — 88 |
Schedule of pre-tax amounts of derivatives designated as net investment hedges recognized in other comprehensive income (loss) | The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss) : Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Foreign currency forward exchange contracts Designated as cash flow hedges $ (52 ) $ 3 $ (5 ) $ 8 Designated as net investment hedges (56 ) 59 (32 ) 69 Interest rate swap contracts designated as cash flow hedges (1 ) — (53 ) — Treasury rate lock agreements designated as cash flow hedges — 88 — 88 |
Summary of pre-tax amounts and location of derivatives recognized in the condensed consolidated statements of earnings | The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings , including the net gains (losses) reclassified out of AOCI into net earnings . See Note 10 for the amount of net gains (losses) reclassified out of AOCI. Three months ended Nine months ended (in millions) Statement of earnings caption 2020 2019 2020 2019 Foreign currency forward exchange contracts Designated as cash flow hedges Cost of products sold $ 15 $ 42 $ 15 $ 119 Designated as net investment hedges Interest expense, net 3 10 16 19 Not designated as hedges Net foreign exchange loss 31 (55 ) 36 (95 ) Treasury rate lock agreements designated as cash flow hedges Interest expense, net 6 — 18 — Interest rate swap contracts Designated as cash flow hedges Interest expense, net (8 ) — (10 ) — Designated as fair value hedges Interest expense, net 1 78 398 443 Debt designated as hedged item in fair value hedges Interest expense, net (1 ) (78 ) (398 ) (443 ) |
Summary of bases used to measure assets and liabilities carried at fair value on a recurring basis | The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of September 30, 2020 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets Significant other observable Significant unobservable inputs Assets Cash and equivalents $ 7,890 $ 2,836 $ 5,054 $ — Money market funds and time deposits 11 — 11 — Debt securities 53 — 53 — Equity securities 146 138 8 — Interest rate swap contracts 171 — 171 — Foreign currency contracts 49 — 49 — Total assets $ 8,320 $ 2,974 $ 5,346 $ — Liabilities Interest rate swap contracts $ 40 $ — $ 40 $ — Foreign currency contracts 70 — 70 — Contingent consideration 8,327 — — 8,327 Total liabilities $ 8,437 $ — $ 110 $ 8,327 The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of December 31, 2019 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets Significant other observable Significant unobservable inputs Assets Cash and equivalents $ 39,924 $ 1,542 $ 38,382 $ — Debt securities 3 — 3 — Equity securities 24 24 — — Interest rate swap contracts 31 — 31 — Foreign currency contracts 22 — 22 — Total assets $ 40,004 $ 1,566 $ 38,438 $ — Liabilities Interest rate swap contracts $ 76 $ — $ 76 $ — Foreign currency contracts 56 — 56 — Contingent consideration 7,340 — — 7,340 Total liabilities $ 7,472 $ — $ 132 $ 7,340 |
Summary of significant level 3 unobservable inputs | The fair value of the company's contingent consideration liabilities as of September 30, 2020 was calculated using the following significant unobservable inputs: Range Weighted average (a) Discount rate 0.2% - 2.6% 1.5 % Probability of payment for unachieved milestones 16% - 57% 54 % Probability of payment for royalties by indication (b) 16% - 100% 89 % Projected year of payments 2020 - 2034 2027 (a) Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities. (b) Excludes early stage indications with 0% estimated probability of payment and includes approved indications with 100% probability of payment. Excluding approved indications, the estimated probability of payment ranged from 16% to 56% at September 30, 2020 . |
Schedule of changes in fair value of Level 3 inputs | The following table presents the changes in fair value of total contingent consideration liabilities which are measured using Level 3 inputs: Nine months ended (in millions) 2020 2019 Beginning balance $ 7,340 $ 4,483 Additions (a) 121 — Change in fair value recognized in net earnings 1,078 2,653 Payments (212 ) (179 ) Ending balance $ 8,327 $ 6,957 (a) Represents contingent consideration liabilities assumed in the Allergan acquisition. |
Schedule of book values, approximate fair values and bases used to measure certain financial instruments | The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, 2020 are shown in the table below: Basis of fair value measurement (in millions) Book value Approximate fair value Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Liabilities Short-term borrowings $ 54 $ 54 $ — $ 54 $ — Current portion of long-term debt and finance lease obligations, excluding fair value hedges 4,709 4,732 4,279 453 — Long-term debt and finance lease obligations, excluding fair value hedges 81,972 90,201 88,589 1,612 — Total liabilities $ 86,735 $ 94,987 $ 92,868 $ 2,119 $ — The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2019 are shown in the table below: Basis of fair value measurement (in millions) Book value Approximate fair value Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Liabilities Current portion of long-term debt and finance lease obligations, excluding fair value hedges $ 3,755 $ 3,760 $ 3,753 $ 7 $ — Long-term debt and finance lease obligations, excluding fair value hedges 63,021 66,651 66,631 20 — Total liabilities $ 66,776 $ 70,411 $ 70,384 $ 27 $ — |
Summary of acquired debt outstanding | The following table summarizes acquired debt outstanding as of September 30, 2020 : (dollars in millions) September 30, 2020 Senior USD notes 4.875% Senior Notes due 2021 $ 450 5.000% Senior Notes due 2021 1,200 3.450% Senior Notes due 2022 2,878 3.250% Senior Notes due 2022 1,700 2.800% Senior Notes due 2023 350 3.850% Senior Notes due 2024 1,032 3.800% Senior Notes due 2025 3,021 4.550% Senior Notes due 2035 1,789 4.625% Senior Notes due 2042 457 4.850% Senior Notes due 2044 1,074 4.750% Senior Notes due 2045 881 Senior Euro notes Floating Rate Notes due 2020 (€700 principal) 821 0.500% Senior Notes due 2021 (€750 principal) 879 1.500% Senior Notes due 2023 (€500 principal) 586 1.250% Senior Notes due 2024 (€700 principal) 821 2.625% Senior Notes due 2028 (€500 principal) 586 2.125% Senior Notes due 2029 (€550 principal) 645 Unamortized purchase price adjustments of Allergan debt 1,256 Total acquired debt outstanding $ 20,426 |
Post-Employment Benefits (Table
Post-Employment Benefits (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Postemployment Benefits [Abstract] | |
Summary of net periodic benefit costs relating to the company's defined benefit and other post-employment plans | The following table summarizes net periodic benefit cost relating to the company’s defined benefit and other post-employment plans: Defined Other post- Three months ended Nine months ended Three months ended Nine months ended (in millions) 2020 2019 2020 2019 2020 2019 2020 2019 Service cost $ 93 $ 67 $ 277 $ 202 $ 10 $ 6 $ 31 $ 19 Interest cost 68 64 196 194 8 6 25 21 Expected return on plan assets (148 ) (118 ) (426 ) (356 ) — — — — Amortization of actuarial losses and prior service cost 57 27 171 82 7 1 17 1 Net periodic benefit cost $ 70 $ 40 $ 218 $ 122 $ 25 $ 13 $ 73 $ 41 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Summary of share-based compensation expense | Stock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and is summarized as follows: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Cost of products sold $ 11 $ 4 $ 37 $ 24 Research and development 54 31 200 136 Selling, general and administrative 97 40 380 191 Pre-tax compensation expense 162 75 617 351 Tax benefit 32 15 109 64 After-tax compensation expense $ 130 $ 60 $ 508 $ 287 |
Summary of quarterly cash dividends | The following table summarizes quarterly cash dividends declared during 2020 and 2019 : 2020 2019 Date Declared Payment Date Dividend Per Share Date Declared Payment Date Dividend Per Share 10/30/20 02/16/21 $ 1.30 11/01/19 02/14/20 $ 1.18 09/11/20 11/16/20 $ 1.18 09/06/19 11/15/19 $ 1.07 06/17/20 08/14/20 $ 1.18 06/20/19 08/15/19 $ 1.07 02/20/20 05/15/20 $ 1.18 02/21/19 05/15/19 $ 1.07 |
Summary of changes in balances of each component of accumulated other comprehensive loss | The following table summarizes the changes in each component of accumulated other comprehensive loss , net of tax, for the nine months ended September 30, 2019 : (in millions) Foreign currency Net investment hedging activities Pension and post- Marketable security activities Cash flow hedging Total Balance as of December 31, 2018 $ (830 ) $ (65 ) $ (1,722 ) $ (10 ) $ 147 $ (2,480 ) Other comprehensive income (loss) before reclassifications (288 ) 199 12 12 77 12 Net losses (gains) reclassified from accumulated other comprehensive loss — (15 ) 66 (2 ) (109 ) (60 ) Net current-period other comprehensive income (loss) (288 ) 184 78 10 (32 ) (48 ) Balance as of September 30, 2019 $ (1,118 ) $ 119 $ (1,644 ) $ — $ 115 $ (2,528 ) The following table summarizes the changes in each component of accumulated other comprehensive loss , net of tax, for the nine months ended September 30, 2020 : (in millions) Foreign currency Net investment hedging activities Pension and post-employment Cash flow hedging Total Balance as of December 31, 2019 $ (928 ) $ 9 $ (2,965 ) $ 288 $ (3,596 ) Other comprehensive income (loss) before reclassifications 726 (443 ) (14 ) (49 ) 220 Net losses (gains) reclassified from accumulated other comprehensive loss — (12 ) 148 (19 ) 117 Net current-period other comprehensive income (loss) 726 (455 ) 134 (68 ) 337 Balance as of September 30, 2020 $ (202 ) $ (446 ) $ (2,831 ) $ 220 $ (3,259 ) |
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive loss | The following table presents the impact on AbbVie’s condensed consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss : Three months ended Nine months ended (in millions) (brackets denote gains) 2020 2019 2020 2019 Net investment hedging activities Gains on derivative amount excluded from effectiveness testing (a) $ (3 ) $ (10 ) $ (16 ) $ (19 ) Tax expense 1 2 4 4 Total reclassifications, net of tax $ (2 ) $ (8 ) $ (12 ) $ (15 ) Pension and post-employment benefits Amortization of actuarial losses and other (b) $ 63 $ 28 $ 188 $ 83 Tax benefit (13 ) (5 ) (40 ) (17 ) Total reclassifications, net of tax $ 50 $ 23 $ 148 $ 66 Cash flow hedging activities Gains on foreign currency forward exchange contracts (c) $ (15 ) $ (42 ) $ (15 ) $ (119 ) Gains on treasury rate lock agreements (a) (6 ) — (18 ) — Losses on interest rate swap contracts (a) 8 — 10 — Tax expense 3 3 4 10 Total reclassifications, net of tax $ (10 ) $ (39 ) $ (19 ) $ (109 ) (a) Amounts are included in interest expense, net (see Note 8 ). (b) Amounts are included in the computation of net periodic benefit cost (see Note 9 ). (c) Amounts are included in cost of products sold (see Note 8 ). |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of worldwide net revenues | The following table details AbbVie’s worldwide net revenues: Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Immunology Humira United States $ 4,189 $ 3,887 $ 11,819 $ 10,895 International 951 1,049 2,861 3,357 Total $ 5,140 $ 4,936 $ 14,680 $ 14,252 Skyrizi United States $ 379 $ 76 $ 934 $ 118 International 56 15 131 21 Total $ 435 $ 91 $ 1,065 $ 139 Rinvoq United States $ 191 $ 14 $ 409 $ 14 International 24 — 41 — Total $ 215 $ 14 $ 450 $ 14 Hematologic Oncology Imbruvica United States $ 1,119 $ 1,042 $ 3,140 $ 2,757 Collaboration revenues 251 215 750 621 Total $ 1,370 $ 1,257 $ 3,890 $ 3,378 Venclexta United States $ 204 $ 142 $ 596 $ 364 International 148 79 376 177 Total $ 352 $ 221 $ 972 $ 541 Aesthetics Botox Cosmetic (a) United States $ 237 $ — $ 384 $ — International 156 — 235 — Total $ 393 $ — $ 619 $ — Juvederm Collection (a) United States $ 115 $ — $ 171 $ — International 159 — 216 — Total $ 274 $ — $ 387 $ — Other Aesthetics (a) United States $ 265 $ — $ 392 $ — International 35 — 50 — Total $ 300 $ — $ 442 $ — Neuroscience Botox Therapeutic (a) United States $ 429 $ — $ 683 $ — International 94 — 137 — Total $ 523 $ — $ 820 $ — Vraylar (a) United States $ 358 $ — $ 550 $ — Duodopa United States $ 25 $ 26 $ 75 $ 72 International 98 91 290 271 Total $ 123 $ 117 $ 365 $ 343 Ubrelvy (a) United States $ 38 $ — $ 60 $ — Other Neuroscience (a) United States $ 203 $ — $ 306 $ — International 4 — 6 — Three months ended Nine months ended (in millions) 2020 2019 2020 2019 Total $ 207 $ — $ 312 $ — Eye Care Lumigan/Ganfort (a) United States $ 62 $ — $ 97 $ — International 87 — 128 — Total $ 149 $ — $ 225 $ — Alphagan/Combigan (a) United States $ 84 $ — $ 131 $ — International 39 — 61 — Total $ 123 $ — $ 192 $ — Restasis (a) United States $ 284 $ — $ 422 $ — International 15 — 21 — Total $ 299 $ — $ 443 $ — Other Eye Care (a) United States $ 119 $ — $ 173 $ — International 150 — 224 — Total $ 269 $ — $ 397 $ — Women's Health Lo Loestrin (a) United States $ 129 $ — $ 207 $ — International 5 — 7 — Total $ 134 $ — $ 214 $ — Orilissa/Oriahnn United States $ 24 $ 27 $ 84 $ 58 International 1 — 3 1 Total $ 25 $ 27 $ 87 $ 59 Other Women's Health (a) United States $ 74 $ — $ 108 $ — International 6 — 8 — Total $ 80 $ — $ 116 $ — Other Key Products Mavyret United States $ 185 $ 368 $ 565 $ 1,167 International 229 327 784 1,098 Total $ 414 $ 695 $ 1,349 $ 2,265 Creon United States $ 282 $ 265 $ 810 $ 749 Lupron United States $ 99 $ 187 $ 461 $ 546 International 34 43 110 122 Total $ 133 $ 230 $ 571 $ 668 Linzess/Constella (a) United States $ 240 $ — $ 370 $ — International 8 — 11 — Total $ 248 $ — $ 381 $ — Synthroid United States $ 189 $ 197 $ 577 $ 582 All other $ 829 $ 429 $ 1,972 $ 1,572 Total net revenues $ 12,902 $ 8,479 $ 31,946 $ 24,562 (a) Net revenues for the nine months ended September 30, 2020 include product revenues for Allergan products only from May 8, 2020, which was the acquisition closing date, through September 30, 2020 . |
Supplemental Financial Inform_3
Supplemental Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Interest Expense, Net | |||||
Interest expense | $ 630 | $ 480 | $ 1,825 | $ 1,225 | |
Interest income | (10) | (60) | (163) | (171) | |
Interest expense, net | 620 | 420 | 1,662 | 1,054 | |
Inventories | |||||
Finished goods | 1,444 | 1,444 | $ 485 | ||
Work-in-process | 1,295 | 1,295 | 942 | ||
Raw materials | 735 | 735 | 386 | ||
Inventories | 3,474 | 3,474 | 1,813 | ||
Property and Equipment | |||||
Property and equipment, gross | 10,391 | 10,391 | 8,188 | ||
Accumulated depreciation | (5,405) | (5,405) | (5,226) | ||
Property and equipment, net | 4,986 | 4,986 | $ 2,962 | ||
Depreciation expense | $ 175 | $ 114 | $ 439 | $ 346 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basic EPS | ||||
Net earnings attributable to AbbVie Inc. | $ 2,308 | $ 1,884 | $ 4,580 | $ 5,081 |
Earnings allocated to participating securities | 17 | 10 | 44 | 27 |
Earnings available to common shareholders | $ 2,291 | $ 1,874 | $ 4,536 | $ 5,054 |
Weighted-average basic shares outstanding (in shares) | 1,769 | 1,481 | 1,633 | 1,480 |
Basic earnings per share (in dollars per share) | $ 1.30 | $ 1.27 | $ 2.78 | $ 3.41 |
Diluted EPS | ||||
Net earnings attributable to AbbVie Inc. | $ 2,308 | $ 1,884 | $ 4,580 | $ 5,081 |
Earnings allocated to participating securities | 17 | 10 | 44 | 27 |
Earnings available to common shareholders | $ 2,291 | $ 1,874 | $ 4,536 | $ 5,054 |
Weighted-average basic shares outstanding (in shares) | 1,769 | 1,481 | 1,633 | 1,480 |
Effect of dilutive securities (in shares) | 5 | 2 | 4 | 3 |
Weighted-average diluted shares outstanding (in shares) | 1,774 | 1,483 | 1,637 | 1,483 |
Diluted earnings per share (in dollars per share) | $ 1.29 | $ 1.26 | $ 2.77 | $ 3.41 |
Licensing, Acquisitions, and _3
Licensing, Acquisitions, and Other Arrangements - Acquisition of Allergan (Details) - USD ($) $ / shares in Units, $ in Millions | May 08, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Business Acquisition | ||||||||
Closing price of AbbVie common stock (in dollars per share) | $ 83.96 | |||||||
Amortization of intangible assets | $ 2,100 | $ 389 | $ 3,967 | $ 1,162 | ||||
Fair Value of Assets Acquired and Liabilities Assumed | ||||||||
Goodwill | 42,801 | $ 42,801 | 42,801 | $ 15,604 | ||||
Allergan plc | ||||||||
Business Acquisition | ||||||||
Cash per share received by Allergan shareholders (in dollars per share) | $ 120.30 | |||||||
Amount of AbbVie stock per share received by Allergan shareholders (in shares) | 0.8660 | |||||||
Allergan ordinary shares outstanding at closing (in shares) | 330,000,000 | |||||||
Shares of AbbVie's common stock issued to Allergan shareholders (in shares) | 286,000,000 | |||||||
Stock options issued to Allergan's equity award holders (in shares) | 11,200,000 | |||||||
RSUs issued to Allergan's equity award holders (in shares) | 8,200,000 | |||||||
Fair value step-up adjustment to inventories | $ 1,200 | |||||||
Fair value step-up adjustment to inventories amortization period | 1 year | |||||||
Weighted average useful life of acquired intangible assets | 9 years | |||||||
Fair value of purchase price adjustment to long-term debt | 1,300 | |||||||
Net revenues attributable to Allergan from acquisition date | $ 5,900 | |||||||
Operating losses attributable to Allergan from acquisition date | 1,500 | |||||||
Amortization of intangible assets | 2,600 | |||||||
Inventory fair value step-up amortization | $ 964 | |||||||
Consideration Transferred | ||||||||
Cash consideration paid to Allergan shareholders | [1] | 39,675 | ||||||
Fair value of AbbVie common stock issued to Allergan shareholders | [2] | 23,979 | ||||||
Fair value of AbbVie equity stock issued to Allergan equity award holders | [3] | 430 | ||||||
Total consideration | 64,084 | |||||||
Fair Value of Assets Acquired and Liabilities Assumed | ||||||||
Cash and equivalents | 1,537 | |||||||
Short-term investments | 1,421 | |||||||
Accounts receivable | 2,423 | |||||||
Inventories | 2,340 | |||||||
Prepaid expenses and other current assets | 1,984 | |||||||
Investments | 137 | |||||||
Property and equipment | 1,912 | |||||||
Intangible assets - Developed product rights | 58,280 | |||||||
Intangible assets - In-process research and development | 1,040 | |||||||
Other noncurrent assets | 1,452 | |||||||
Short-term borrowings | (60) | |||||||
Current portion of long-term debt and finance lease obligations | (1,899) | |||||||
Accounts payable and accrued liabilities | (5,813) | |||||||
Long-term debt and finance lease obligations | (18,937) | |||||||
Deferred income taxes | (4,068) | |||||||
Other long-term liabilities | (4,728) | |||||||
Total identifiable net assets | 37,021 | |||||||
Goodwill | 27,063 | |||||||
Total assets acquired and liabilities assumed | $ 64,084 | |||||||
Pro Forma Information | ||||||||
Net revenues | 12,902 | 12,428 | 36,663 | 36,085 | ||||
Net earnings (loss) | 2,829 | 977 | 6,142 | (2,615) | ||||
Allergan plc | Selling, general and administrative | ||||||||
Business Acquisition | ||||||||
Acquisition-related expenses | $ 0 | $ 26 | $ 781 | $ 50 | ||||
[1] | (a) Represents cash consideration transferred of $120.30 per outstanding Allergan ordinary share based on 330 million Allergan ordinary shares outstanding at closing. | |||||||
[2] | (b) Represents the acquisition date fair value of 286 million shares of AbbVie common stock issued to Allergan shareholders based on the exchange ratio of 0.8660 AbbVie shares for each outstanding Allergan ordinary share at the May 8, 2020 closing price of $83.96 per share. | |||||||
[3] | (c) Represents the pre-acquisition service portion of the fair value of 11 million AbbVie stock options and 8 million RSUs issued to Allergan equity award holders. |
Licensing, Acquisitions, and _4
Licensing, Acquisitions, and Other Arrangements - Other Licensing & Acquisitions Activity (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Collaborative and license agreements | ||||||
Cash outflows related to acquisitions and investments | $ 1,072 | $ 476 | ||||
Acquired in-process research and development | $ 45 | $ 0 | 898 | $ 246 | ||
Collaborative arrangement | Genmab A/S | ||||||
Collaborative and license agreements | ||||||
Potential payments under agreement certain milestones | $ 3,200 | 3,200 | ||||
In-process research and development | Collaborative arrangement | Genmab A/S | ||||||
Collaborative and license agreements | ||||||
Acquired in-process research and development | $ 750 | |||||
Forecast | Collaborative arrangement | I-Mab Biopharma | ||||||
Collaborative and license agreements | ||||||
Potential payments under agreement certain milestones | $ 1,700 | |||||
Forecast | In-process research and development | Collaborative arrangement | I-Mab Biopharma | ||||||
Collaborative and license agreements | ||||||
Acquired in-process research and development | 200 | |||||
Milestone payment | 20 | |||||
Upfront payment | $ 180 | |||||
Subsequent event | Luminera | ||||||
Collaborative and license agreements | ||||||
Upfront payment to Luminera shareholders | $ 121 | |||||
Contingent consideration | $ 90 |
Collaborations (Details)
Collaborations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Collaborative and license agreements | |||||
AbbVie's receivable from Janssen | $ 8,416 | $ 8,416 | $ 5,428 | ||
AbbVie's payable to Janssen | 19,404 | 19,404 | 11,832 | ||
Janssen Biotech Inc. | Collaborative arrangement | |||||
Collaborative and license agreements | |||||
Milestone payments | 200 | $ 200 | |||
Share of collaboration development costs responsible by Janssen (as a percent) | 60.00% | ||||
Share of collaboration development costs responsible by the entity (as a percent) | 40.00% | ||||
Global - AbbVie's share of other costs (included in respective line items) | 74 | $ 81 | $ 211 | $ 230 | |
AbbVie's receivable from Janssen | 276 | 276 | 235 | ||
AbbVie's payable to Janssen | 468 | 468 | $ 455 | ||
Janssen Biotech Inc. | Collaborative arrangement | United States | |||||
Collaborative and license agreements | |||||
Collaboration counterparty's share of collaborative arrangement expenses (included in cost of products sold) | 524 | 489 | 1,467 | 1,297 | |
Janssen Biotech Inc. | Collaborative arrangement | International | |||||
Collaborative and license agreements | |||||
International - AbbVie's share of profits (included in net revenues) | 251 | 215 | 750 | 621 | |
Genentech, Inc. | Collaborative arrangement | |||||
Collaborative and license agreements | |||||
Collaboration counterparty's share of collaborative arrangement expenses (included in cost of products sold) | 139 | 89 | 390 | 220 | |
AbbVie's share of development costs (included in R&D) | 27 | 32 | 88 | 94 | |
Genentech, Inc. | Collaborative arrangement | United States | |||||
Collaborative and license agreements | |||||
AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A) | $ 9 | $ 9 | $ 34 | $ 27 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) | 9 Months Ended | |
Sep. 30, 2020USD ($) | ||
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | $ 15,604,000,000 | |
Additions | 27,063,000,000 | [1] |
Foreign currency translation adjustments | 134,000,000 | |
Balance at the end of the period | 42,801,000,000 | |
Accumulated goodwill impairment losses | ||
Accumulated goodwill impairment losses | $ 0 | |
[1] | (a) Goodwill additions related to the acquisition of Allergan in the second quarter of 2020 (see Note 4 ). |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets | |||||
Gross carrying amount | $ 86,279,000,000 | $ 86,279,000,000 | $ 27,345,000,000 | ||
Accumulated amortization | (12,676,000,000) | (12,676,000,000) | (8,696,000,000) | ||
Net carrying amount | 73,603,000,000 | 73,603,000,000 | 18,649,000,000 | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 1,040,000,000 | 1,040,000,000 | 0 | ||
Intangible Assets, Gross (Excluding Goodwill) | 87,319,000,000 | 87,319,000,000 | 27,345,000,000 | ||
Intangible assets, net | 74,643,000,000 | 74,643,000,000 | 18,649,000,000 | ||
Amortization expense | 2,100,000,000 | $ 389,000,000 | 3,967,000,000 | $ 1,162,000,000 | |
Definite-lived intangible assets impairment charges | 0 | 0 | 0 | 0 | |
Indefinite-lived intangible asset impairment charges | 0 | $ 1,000,000,000 | 0 | $ 1,000,000,000 | |
Developed product rights | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount | 78,451,000,000 | 78,451,000,000 | 19,547,000,000 | ||
Accumulated amortization | (9,917,000,000) | (9,917,000,000) | (6,405,000,000) | ||
Net carrying amount | 68,534,000,000 | 68,534,000,000 | 13,142,000,000 | ||
License agreements | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount | 7,828,000,000 | 7,828,000,000 | 7,798,000,000 | ||
Accumulated amortization | (2,759,000,000) | (2,759,000,000) | (2,291,000,000) | ||
Net carrying amount | $ 5,069,000,000 | $ 5,069,000,000 | $ 5,507,000,000 |
Integration and Restructuring_3
Integration and Restructuring Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Allergan integration plan | ||||
Restructuring charges | ||||
Expected annual cost synergies | $ 2,000 | |||
Integration related costs | $ 2,000 | $ 2,000 | ||
Allergan integration plan | Research and development | ||||
Restructuring charges | ||||
Expected annual cost synergies (as a percent) | 50.00% | |||
Allergan integration plan | Selling, general and administrative | ||||
Restructuring charges | ||||
Expected annual cost synergies (as a percent) | 40.00% | |||
Allergan integration plan | Cost of products sold | ||||
Restructuring charges | ||||
Expected annual cost synergies (as a percent) | 10.00% | |||
Allergan integration plan | Severance and employee benefits | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 79 | $ 562 | ||
Restructuring reserve rollforward | ||||
Restructuring charges | 467 | |||
Payments and other adjustments | (178) | |||
Accrued balance end of the period | 289 | 289 | ||
Allergan integration plan | Severance and employee benefits | Research and development | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 40 | 172 | ||
Allergan integration plan | Severance and employee benefits | Selling, general and administrative | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 29 | 347 | ||
Allergan integration plan | Severance and employee benefits | Cost of products sold | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 10 | 43 | ||
Allergan integration plan | Other integration | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 160 | 303 | ||
Restructuring reserve rollforward | ||||
Restructuring charges | 303 | |||
Payments and other adjustments | (270) | |||
Accrued balance end of the period | 33 | 33 | ||
Allergan integration plan | Other integration | Research and development | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 91 | 135 | ||
Allergan integration plan | Other integration | Selling, general and administrative | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 57 | 155 | ||
Allergan integration plan | Other integration | Cost of products sold | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 12 | 13 | ||
Other restructuring | ||||
Restructuring charges | ||||
Charges associated with integration or restructuring plans | 11 | $ 22 | 42 | $ 208 |
Restructuring reserve rollforward | ||||
Accrued balance beginning of the period | 140 | |||
Restructuring charges | 40 | |||
Payments and other adjustments | (87) | |||
Accrued balance end of the period | $ 93 | $ 93 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measures - Financial Instruments (Details) £ in Millions, SFr in Millions | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020GBP (£) | Sep. 30, 2020EUR (€) | Sep. 30, 2020CHF (SFr) | Dec. 31, 2019USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2019EUR (€) | Dec. 31, 2019CHF (SFr) | |
Derivative instruments, notional amount and fair value | |||||||||||
Amount excluded from the assessment of effectiveness for cash flow hedges | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
Amount excluded from the assessment of effectiveness for fair value hedges | 0 | 0 | 0 | 0 | |||||||
Fair value - Derivatives in asset position | 220,000,000 | 220,000,000 | $ 53,000,000 | ||||||||
Fair value - Derivatives in liability position | 110,000,000 | 110,000,000 | 132,000,000 | ||||||||
Designated as hedging instrument | Net investment hedges | Senior notes | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Principal amount of unsecured senior notes | € | € 7,300,000,000 | € 3,600,000,000 | |||||||||
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Notional amount of derivative instruments | 1,600,000,000 | $ 1,600,000,000 | 957,000,000 | ||||||||
Duration of forward exchange contracts | 18 months | ||||||||||
Approximate length of time over which accumulated gains and losses will be recognized in Cost of products sold | 6 months | ||||||||||
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges | Prepaid expenses and other | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in asset position | 0 | $ 0 | 3,000,000 | ||||||||
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges | Accounts payable and accrued liabilities | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in liability position | 32,000,000 | 32,000,000 | 14,000,000 | ||||||||
Designated as hedging instrument | Foreign currency forward exchange contracts | Net investment hedges | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Notional amount of derivative instruments | £ 204 | € 971,000,000 | SFr 62 | £ 204 | € 971,000,000 | SFr 62 | |||||
Designated as hedging instrument | Foreign currency forward exchange contracts | Net investment hedges | Prepaid expenses and other | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in asset position | 14,000,000 | 14,000,000 | 0 | ||||||||
Designated as hedging instrument | Foreign currency forward exchange contracts | Net investment hedges | Accounts payable and accrued liabilities | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in liability position | 3,000,000 | 3,000,000 | 24,000,000 | ||||||||
Designated as hedging instrument | Treasury rate lock agreements | Cash flow hedges | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Notional amount of derivative instruments | $ 10,000,000,000 | $ 10,000,000,000 | |||||||||
Designated as hedging instrument | Interest rate swap contracts | Cash flow hedges | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Notional amount of derivative instruments | 2,300,000,000 | 2,300,000,000 | 2,300,000,000 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Cash flow hedges | Prepaid expenses and other | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in asset position | 0 | 0 | 0 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Cash flow hedges | Accounts payable and accrued liabilities | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in liability position | 7,000,000 | 7,000,000 | 0 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Cash flow hedges | Other assets | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in asset position | 0 | 0 | 3,000,000 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Cash flow hedges | Other long-term liabilities | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in liability position | 33,000,000 | 33,000,000 | 0 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Fair value hedges | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Notional amount of derivative instruments | 4,800,000,000 | 4,800,000,000 | 10,800,000,000 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Fair value hedges | Prepaid expenses and other | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in asset position | 14,000,000 | 14,000,000 | 0 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Fair value hedges | Accounts payable and accrued liabilities | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in liability position | 0 | 0 | 2,000,000 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Fair value hedges | Other assets | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in asset position | 157,000,000 | 157,000,000 | 28,000,000 | ||||||||
Designated as hedging instrument | Interest rate swap contracts | Fair value hedges | Other long-term liabilities | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in liability position | 0 | 0 | 74,000,000 | ||||||||
Not designated as hedging instrument | Foreign currency forward exchange contracts | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Notional amount of derivative instruments | 8,300,000,000 | 8,300,000,000 | 7,100,000,000 | ||||||||
Not designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses and other | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in asset position | 35,000,000 | 35,000,000 | 19,000,000 | ||||||||
Not designated as hedging instrument | Foreign currency forward exchange contracts | Accounts payable and accrued liabilities | |||||||||||
Derivative instruments, notional amount and fair value | |||||||||||
Fair value - Derivatives in liability position | $ 35,000,000 | $ 35,000,000 | $ 18,000,000 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measures - Amount Of Gain/(Loss) Recognized For Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Cost of products sold | ||||
Gain (loss) on derivatives | ||||
Pre-tax gains (losses) to be transferred into cost of products sold for foreign currency cash flow hedges during the next 12 months | $ (22) | $ (22) | ||
Interest expense, net | ||||
Gain (loss) on derivatives | ||||
Pre-tax gains (losses) to be transferred into interest expense, net for interest rate swap cash flow hedges during the next 12 months | (27) | (27) | ||
Pre-tax gains (losses) to be transferred into interest expense, net for treasury rate lock agreement cash flow hedges during the next 12 months | 24 | 24 | ||
Interest expense, net | Fair value hedges | ||||
Gain (loss) on derivatives | ||||
Debt designated as hedged item in fair value hedges gain (loss) recognized in the consolidated statements of earnings | (1) | $ (78) | (398) | $ (443) |
Designated as hedging instrument | Senior notes | ||||
Gain (loss) on derivatives | ||||
Pre-tax gains (losses) from net investment hedge instruments recognized in other comprehensive income | (340) | 152 | (532) | 187 |
Foreign currency forward exchange contracts | Designated as hedging instrument | ||||
Gain (loss) on derivatives | ||||
Pre-tax gains (losses) from cash flow hedges recognized in other comprehensive income | (52) | 3 | (5) | 8 |
Pre-tax gains (losses) from net investment hedge instruments recognized in other comprehensive income | (56) | 59 | (32) | 69 |
Foreign currency forward exchange contracts | Designated as hedging instrument | Cost of products sold | Cash flow hedges | ||||
Gain (loss) on derivatives | ||||
Derivative instrument net gains (losses) recognized in the consolidate statements of earnings | 15 | 42 | 15 | 119 |
Foreign currency forward exchange contracts | Designated as hedging instrument | Interest expense, net | Net investment hedges | ||||
Gain (loss) on derivatives | ||||
Derivative instrument net gains (losses) recognized in the consolidate statements of earnings | 3 | 10 | 16 | 19 |
Foreign currency forward exchange contracts | Not designated as hedges | Net foreign exchange loss | ||||
Gain (loss) on derivatives | ||||
Derivative instrument net gains (losses) recognized in the consolidate statements of earnings | 31 | (55) | 36 | (95) |
Designated as fair value hedges | Designated as hedging instrument | ||||
Gain (loss) on derivatives | ||||
Pre-tax gains (losses) from cash flow hedges recognized in other comprehensive income | (1) | 0 | (53) | 0 |
Designated as fair value hedges | Designated as hedging instrument | Interest expense, net | Cash flow hedges | ||||
Gain (loss) on derivatives | ||||
Derivative instrument net gains (losses) recognized in the consolidate statements of earnings | (8) | 0 | (10) | 0 |
Designated as fair value hedges | Designated as hedging instrument | Interest expense, net | Fair value hedges | ||||
Gain (loss) on derivatives | ||||
Derivative instrument net gains (losses) recognized in the consolidate statements of earnings | 1 | 78 | 398 | 443 |
Treasury rate lock agreements | Designated as hedging instrument | ||||
Gain (loss) on derivatives | ||||
Pre-tax gains (losses) from cash flow hedges recognized in other comprehensive income | 0 | 88 | 0 | 88 |
Treasury rate lock agreements | Designated as hedging instrument | Interest expense, net | Cash flow hedges | ||||
Gain (loss) on derivatives | ||||
Derivative instrument net gains (losses) recognized in the consolidate statements of earnings | $ 6 | $ 0 | $ 18 | $ 0 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measures - Fair Value Measures (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Foreign currency contracts | $ 220 | $ 53 |
Liabilities | ||
Foreign currency contracts | 110 | 132 |
Quoted prices in active markets for identical assets (Level 1) | ||
Liabilities | ||
Total liabilities | 92,868 | 70,384 |
Fair Value, Recurring | ||
Assets | ||
Cash and equivalents | 7,890 | 39,924 |
Debt securities | 53 | 3 |
Equity securities | 146 | 24 |
Interest rate swap contracts | 171 | 31 |
Total assets | 8,320 | 40,004 |
Liabilities | ||
Interest rate swap contracts | 40 | 76 |
Contingent consideration | 8,327 | 7,340 |
Total liabilities | 8,437 | 7,472 |
Fair Value, Recurring | Foreign currency contracts | ||
Assets | ||
Foreign currency contracts | 49 | 22 |
Liabilities | ||
Foreign currency contracts | 70 | 56 |
Fair Value, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Cash and equivalents | 2,836 | 1,542 |
Debt securities | 0 | 0 |
Equity securities | 138 | 24 |
Interest rate swap contracts | 0 | 0 |
Total assets | 2,974 | 1,566 |
Liabilities | ||
Interest rate swap contracts | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Recurring | Quoted prices in active markets for identical assets (Level 1) | Foreign currency contracts | ||
Assets | ||
Foreign currency contracts | 0 | 0 |
Liabilities | ||
Foreign currency contracts | 0 | 0 |
Fair Value, Recurring | Significant other observable inputs (Level 2) | ||
Assets | ||
Cash and equivalents | 5,054 | 38,382 |
Debt securities | 53 | 3 |
Equity securities | 8 | 0 |
Interest rate swap contracts | 171 | 31 |
Total assets | 5,346 | 38,438 |
Liabilities | ||
Interest rate swap contracts | 40 | 76 |
Contingent consideration | 0 | 0 |
Total liabilities | 110 | 132 |
Fair Value, Recurring | Significant other observable inputs (Level 2) | Foreign currency contracts | ||
Assets | ||
Foreign currency contracts | 49 | 22 |
Liabilities | ||
Foreign currency contracts | 70 | 56 |
Fair Value, Recurring | Significant unobservable inputs (Level 3) | ||
Assets | ||
Cash and equivalents | 0 | 0 |
Debt securities | 0 | 0 |
Equity securities | 0 | 0 |
Interest rate swap contracts | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Interest rate swap contracts | 0 | 0 |
Contingent consideration | 8,327 | 7,340 |
Total liabilities | 8,327 | 7,340 |
Fair Value, Recurring | Significant unobservable inputs (Level 3) | Foreign currency contracts | ||
Assets | ||
Foreign currency contracts | 0 | 0 |
Liabilities | ||
Foreign currency contracts | 0 | $ 0 |
Money market funds and time deposits | Fair Value, Recurring | ||
Assets | ||
Money market funds and time deposits | 11 | |
Money market funds and time deposits | Fair Value, Recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Money market funds and time deposits | 0 | |
Money market funds and time deposits | Fair Value, Recurring | Significant other observable inputs (Level 2) | ||
Assets | ||
Money market funds and time deposits | 11 | |
Money market funds and time deposits | Fair Value, Recurring | Significant unobservable inputs (Level 3) | ||
Assets | ||
Money market funds and time deposits | $ 0 |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measures - Significant Level 3 Unobservable Inputs (Details) | Sep. 30, 2020 | |
Probability of payment for early stage indications | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0 | [1],[2] |
Probability of payment for approved indications | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 1 | [1],[2] |
Weighted average | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.015 | [2] |
Weighted average | Probability of payment for unachieved milestones | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.54 | [2] |
Weighted average | Probability of payment for royalties by indication | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.89 | [1],[2] |
Weighted average | Projected year of payments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 2,027 | [2] |
Minimum | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.002 | |
Minimum | Probability of payment for unachieved milestones | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.16 | |
Minimum | Probability of payment for royalties by indication | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.16 | [1] |
Minimum | Projected year of payments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 2,020 | |
Minimum | Probability of payment for royalties excluding early stage or approved indications | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.16 | [1] |
Maximum | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.026 | |
Maximum | Probability of payment for unachieved milestones | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.57 | |
Maximum | Probability of payment for royalties by indication | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 1 | [1] |
Maximum | Projected year of payments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 2,034 | |
Maximum | Probability of payment for royalties excluding early stage or approved indications | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input for contingent consideration | 0.56 | [1] |
[1] | (b) Excludes early stage indications with 0% estimated probability of payment and includes approved indications with 100% probability of payment. Excluding approved indications, the estimated probability of payment ranged from 16% to 56% at September 30, 2020 . | |
[2] | (a) Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities. |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measures - Transfers of Assets or Liabilities Into or Out of Level 3 of the Fair Value Hierarchy (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Transfers of assets or liabilities between the fair value measurement levels | |||
Transfers of assets into Level 3 of the fair value hierarchy | $ 0 | ||
Transfers of assets out of Level 3 of the fair value hierarchy | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net [Abstract] | |||
Transfers of liabilities into Level 3 of the fair value hierarchy | 0 | ||
Transfers of liabilities out of Level 3 of the fair value hierarchy | 0 | ||
Reconciliation of the fair value measurements that use significant unobservable inputs (Level 3) | |||
Beginning balance | 7,340,000,000 | $ 4,483,000,000 | |
Additions | [1] | 121,000,000 | 0 |
Change in fair value recognized in net earnings | (1,078,000,000) | (2,653,000,000) | |
Payments | (212,000,000) | (179,000,000) | |
Ending balance | $ 8,327,000,000 | $ 6,957,000,000 | |
[1] | (a) Represents contingent consideration liabilities assumed in the Allergan acquisition. |
Financial Instruments and Fai_8
Financial Instruments and Fair Value Measures - Bases Used To Measure The Approximate Fair Values Of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Liabilities | ||
Carrying amount of investments in equity securities that do not have readily determinable fair values | $ 96 | $ 66 |
Quoted prices in active markets for identical assets (Level 1) | ||
Liabilities | ||
Current portion of long-term debt and finance lease obligations, excluding fair value hedges | 4,279 | 3,753 |
Long-term debt and finance lease obligations, excluding fair value hedges | 88,589 | 66,631 |
Total liabilities | 92,868 | 70,384 |
Book value | ||
Liabilities | ||
Short-term Debt, Fair Value | 54 | |
Current portion of long-term debt and finance lease obligations, excluding fair value hedges | 4,709 | 3,755 |
Long-term debt and finance lease obligations, excluding fair value hedges | 81,972 | 63,021 |
Total liabilities | 86,735 | 66,776 |
Approximate fair value | ||
Liabilities | ||
Short-term Debt, Fair Value | 54 | |
Current portion of long-term debt and finance lease obligations, excluding fair value hedges | 4,732 | 3,760 |
Long-term debt and finance lease obligations, excluding fair value hedges | 90,201 | 66,651 |
Total liabilities | 94,987 | 70,411 |
Approximate fair value | Quoted prices in active markets for identical assets (Level 1) | ||
Liabilities | ||
Short-term Debt, Fair Value | 0 | |
Approximate fair value | Significant other observable inputs (Level 2) | ||
Liabilities | ||
Short-term Debt, Fair Value | 54 | |
Current portion of long-term debt and finance lease obligations, excluding fair value hedges | 453 | 7 |
Long-term debt and finance lease obligations, excluding fair value hedges | 1,612 | 20 |
Total liabilities | 2,119 | 27 |
Approximate fair value | Significant unobservable inputs (Level 3) | ||
Liabilities | ||
Short-term Debt, Fair Value | 0 | |
Current portion of long-term debt and finance lease obligations, excluding fair value hedges | 0 | 0 |
Long-term debt and finance lease obligations, excluding fair value hedges | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Financial Instruments and Fai_9
Financial Instruments and Fair Value Measures - Concentrations of Risk (Details) - wholesaler | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Accounts receivable, net | |||
Concentration of Risk | |||
Number of principal customers | 3 | ||
Accounts receivable, net | Geographic Risk | |||
Concentration of Risk | |||
Concentrations risk (as a percent) | 67.00% | 68.00% | |
Total revenues | HUMIRA | |||
Concentration of Risk | |||
Concentrations risk (as a percent) | 46.00% | 58.00% |
Financial Instruments and Fa_10
Financial Instruments and Fair Value Measures - Debt and Credit Facilities (Details) € in Millions | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020USD ($) | May 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020EUR (€) | May 31, 2020EUR (€) | Sep. 30, 2019EUR (€) | |
Debt Instrument [Line Items] | |||||||
Repayment of long-term debt | $ 4,414,000,000 | $ 5,000,000 | |||||
Total acquired debt outstanding | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 20,426,000,000 | 20,426,000,000 | |||||
Unamortized purchase price adjustments of Allergan debt | 1,256,000,000 | 1,256,000,000 | |||||
Term loan facilities | May 2020 floating rate term loans | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 3,000,000,000 | ||||||
Term loan facilities | July 2019 term loan agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity of term loan credit agreement | $ 6,000,000,000 | ||||||
Term loan facilities | Floating rate term loan tranche due May 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | 1,000,000,000 | 1,000,000,000 | |||||
Term loan credit agreement term | 3 years | ||||||
Term loan facilities | Floating rate term loan tranche due May 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | 2,000,000,000 | $ 2,000,000,000 | |||||
Term loan credit agreement term | 5 years | ||||||
Senior notes | Allergan notes exchanged | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 14,000,000,000 | ||||||
Senior notes | Allergan Euro notes exchanged | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | € | € 3,100 | ||||||
Senior notes | Allergan notes assumed | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | 1,500,000,000 | ||||||
Senior notes | Allergan Euro notes assumed | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | € | € 635 | ||||||
Senior notes | 3.375% Senior Notes due 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of long-term debt | $ 650,000,000 | ||||||
Stated interest rate (as a percent) | 3.375% | 3.375% | 3.375% | ||||
Senior notes | 4.875% Senior Notes due 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 450,000,000 | $ 450,000,000 | |||||
Stated interest rate (as a percent) | 4.875% | 4.875% | 4.875% | ||||
Senior notes | 5.000% Senior Notes due 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 1,200,000,000 | $ 1,200,000,000 | |||||
Stated interest rate (as a percent) | 5.00% | 5.00% | 5.00% | ||||
Senior notes | 3.450% Senior Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 2,878,000,000 | $ 2,878,000,000 | |||||
Stated interest rate (as a percent) | 3.45% | 3.45% | 3.45% | ||||
Senior notes | 3.250% Senior Notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 1,700,000,000 | $ 1,700,000,000 | |||||
Stated interest rate (as a percent) | 3.25% | 3.25% | 3.25% | ||||
Senior notes | 2.800% Senior Notes due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 350,000,000 | $ 350,000,000 | |||||
Stated interest rate (as a percent) | 2.80% | 2.80% | 2.80% | ||||
Senior notes | 3.850% Senior Notes due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 1,032,000,000 | $ 1,032,000,000 | |||||
Stated interest rate (as a percent) | 3.85% | 3.85% | 3.85% | ||||
Senior notes | 3.800% Senior Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 3,021,000,000 | $ 3,021,000,000 | |||||
Stated interest rate (as a percent) | 3.80% | 3.80% | 3.80% | ||||
Senior notes | 4.550% Senior Notes due 2035 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 1,789,000,000 | $ 1,789,000,000 | |||||
Stated interest rate (as a percent) | 4.55% | 4.55% | 4.55% | ||||
Senior notes | 4.625% Senior Notes due 2042 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 457,000,000 | $ 457,000,000 | |||||
Stated interest rate (as a percent) | 4.625% | 4.625% | 4.625% | ||||
Senior notes | 4.850% Senior Notes due 2044 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 1,074,000,000 | $ 1,074,000,000 | |||||
Stated interest rate (as a percent) | 4.85% | 4.85% | 4.85% | ||||
Senior notes | 4.750% Senior Notes due 2045 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 881,000,000 | $ 881,000,000 | |||||
Stated interest rate (as a percent) | 4.75% | 4.75% | 4.75% | ||||
Senior notes | Floating Rate Notes due 2020 (€700 principal) | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 821,000,000 | $ 821,000,000 | |||||
Aggregate principal amount of debt | € | € 700 | ||||||
Senior notes | 0.500% Senior Notes due 2021 (€750 principal) | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 879,000,000 | $ 879,000,000 | |||||
Stated interest rate (as a percent) | 0.50% | 0.50% | 0.50% | ||||
Aggregate principal amount of debt | € | € 750 | ||||||
Senior notes | 1.500% Senior Notes due 2023 (€500 principal) | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 586,000,000 | $ 586,000,000 | |||||
Stated interest rate (as a percent) | 1.50% | 1.50% | 1.50% | ||||
Aggregate principal amount of debt | € | € 500 | ||||||
Senior notes | 1.250% Senior Notes due 2024 (€700 principal) | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 821,000,000 | $ 821,000,000 | |||||
Stated interest rate (as a percent) | 1.25% | 1.25% | 1.25% | ||||
Aggregate principal amount of debt | € | € 700 | ||||||
Senior notes | 2.625% Senior Notes due 2028 (€500 principal) | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 586,000,000 | $ 586,000,000 | |||||
Stated interest rate (as a percent) | 2.625% | 2.625% | 2.625% | ||||
Aggregate principal amount of debt | € | € 500 | ||||||
Senior notes | 2.125% Senior Notes due 2029 (€550 principal) | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt obligations, gross | $ 645,000,000 | $ 645,000,000 | |||||
Stated interest rate (as a percent) | 2.125% | 2.125% | 2.125% | ||||
Aggregate principal amount of debt | € | € 550 | ||||||
Senior notes | 2.5% Senior Notes due May 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of long-term debt | $ 3,800,000,000 | ||||||
Stated interest rate (as a percent) | 2.50% | 2.50% | |||||
Senior notes | September 2019 Senior Euro Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt | € | € 1,400 | ||||||
Senior notes | Senior Euro Notes Due in 2027 at 0.750 Percent | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate (as a percent) | 0.75% | 0.75% | |||||
Aggregate principal amount of debt | € | 750 | ||||||
Senior notes | Sec 1.250 Senior Notes due 2031 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt | € | € 650 | ||||||
Senior notes | Senior Euro Notes Due in 2031 at 1.250 Percent | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate (as a percent) | 1.25% | 1.25% |
Financial Instruments and Fa_11
Financial Instruments and Fair Value Measures - Short-Term Borrowings (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Short-Term Borrowings | ||||
Short-term borrowings | $ 54 | $ 0 | ||
Repayments of other short-term borrowings | 0 | $ 3,000 | ||
Commercial paper | ||||
Short-Term Borrowings | ||||
Short-term borrowings | $ 0 | $ 0 | ||
Weighted-average interest rate on commercial paper (as a percent) | 1.80% | 2.50% | ||
Term loan facilities | May 2018 term loan credit agreement | ||||
Short-Term Borrowings | ||||
Repayments of other short-term borrowings | $ 3,000 | |||
Term loan credit agreement term | 364 days |
Post-Employment Benefits (Detai
Post-Employment Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 08, 2020 | |
Defined benefit plans | |||||
Defined benefit and other post-employment plans | |||||
Service cost | $ 93 | $ 67 | $ 277 | $ 202 | |
Interest cost | 68 | 64 | 196 | 194 | |
Expected return on plan assets | (148) | (118) | (426) | (356) | |
Amortization of actuarial losses and prior service cost | 57 | 27 | 171 | 82 | |
Net periodic benefit cost | 70 | 40 | 218 | 122 | |
Other post-employment plans | |||||
Defined benefit and other post-employment plans | |||||
Service cost | 10 | 6 | 31 | 19 | |
Interest cost | 8 | 6 | 25 | 21 | |
Expected return on plan assets | 0 | 0 | 0 | 0 | |
Amortization of actuarial losses and prior service cost | 7 | 1 | 17 | 1 | |
Net periodic benefit cost | $ 25 | $ 13 | $ 73 | $ 41 | |
Allergan plc | Defined benefit plans | |||||
Defined benefit and other post-employment plans | |||||
Post-employment benefit obligations liability assumed | $ 156 |
Equity - Stock-Based Compensati
Equity - Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Pre-tax compensation expense | $ 162 | $ 75 | $ 617 | $ 351 |
Tax benefit | 32 | 15 | 109 | 64 |
After-tax compensation expense | 130 | 60 | 508 | 287 |
Cost of products sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Pre-tax compensation expense | 11 | 4 | 37 | 24 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Pre-tax compensation expense | 54 | 31 | 200 | 136 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Pre-tax compensation expense | $ 97 | $ 40 | $ 380 | $ 191 |
Equity - Stock Options (Details
Equity - Stock Options (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | May 08, 2020 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock options granted (in shares) | 2 | |
Weighted-average grant-date fair value of the stock options granted (in dollars per share) | $ 12.14 | |
Unrecognized compensation cost | $ 16 | |
Period for recognition of unrecognized compensation cost | 2 years | |
Allergan plc | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock options issued to Allergan's equity award holders (in shares) | 11.2 |
Equity - RSUs and Performance S
Equity - RSUs and Performance Shares (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | May 08, 2020 | |
RSUs and Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Shares granted (in shares) | 5.5 | |
Fair market value of awards vested (in dollars per share) | $ 93.50 | |
Unrecognized compensation cost | $ 713 | |
Period for recognition of unrecognized compensation cost | 2 years | |
Allergan plc | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
RSUs issued to Allergan's equity award holders (in shares) | 8.2 |
Equity - Cash Dividends (Detail
Equity - Cash Dividends (Details) - $ / shares | Oct. 30, 2020 | Sep. 11, 2020 | Jun. 17, 2020 | Feb. 20, 2020 | Nov. 01, 2019 | Sep. 06, 2019 | Jun. 20, 2019 | Feb. 21, 2019 |
Dividends Payable | ||||||||
Cash dividends declared per common share (in dollars per share) | $ 1.18 | $ 1.18 | $ 1.18 | $ 1.18 | $ 1.07 | $ 1.07 | $ 1.07 | |
Subsequent event | ||||||||
Dividends Payable | ||||||||
Cash dividends declared per common share (in dollars per share) | $ 1.30 |
Equity - Stock Repurchase Progr
Equity - Stock Repurchase Program (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Equity, Class of Treasury Stock | ||||
Payment for shares repurchased | $ 20 | $ 3 | $ 682 | $ 425 |
Remaining share repurchase authorization amount | $ 3,500 | $ 3,500 | ||
December 2018 Stock Repurchase Authorization | ||||
Equity, Class of Treasury Stock | ||||
Shares repurchased (in shares) | 6 | 4 | ||
Payment for shares repurchased | $ 500 | $ 300 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 14,732 | $ (8,566) | $ (8,172) | $ (8,446) |
Other comprehensive income (loss) | 176 | (37) | 337 | (48) |
Ending balance | 15,289 | (8,226) | 15,289 | (8,226) |
Foreign currency translation adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (928) | (830) | ||
Other comprehensive income (loss) before reclassifications | 726 | (288) | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Other comprehensive income (loss) | 726 | (288) | ||
Ending balance | (202) | (1,118) | (202) | (1,118) |
Net investment hedging activities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 9 | (65) | ||
Other comprehensive income (loss) before reclassifications | (443) | 199 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | (12) | (15) | ||
Other comprehensive income (loss) | (455) | 184 | ||
Ending balance | (446) | 119 | (446) | 119 |
Pension and post-employment benefits | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (2,965) | (1,722) | ||
Other comprehensive income (loss) before reclassifications | (14) | 12 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | 50 | 23 | 148 | 66 |
Other comprehensive income (loss) | 134 | 78 | ||
Ending balance | (2,831) | (1,644) | (2,831) | (1,644) |
Marketable securities activities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (10) | |||
Other comprehensive income (loss) before reclassifications | 12 | |||
Net losses (gains) reclassified from accumulated other comprehensive loss | (2) | |||
Other comprehensive income (loss) | 10 | |||
Ending balance | 0 | 0 | ||
Cash flow hedging activities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 288 | 147 | ||
Other comprehensive income (loss) before reclassifications | (49) | 77 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | (19) | (109) | ||
Other comprehensive income (loss) | (68) | (32) | ||
Ending balance | 220 | 115 | 220 | 115 |
Accumulated other comprehensive income (loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (3,596) | (2,480) | ||
Other comprehensive income (loss) before reclassifications | 220 | 12 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | 117 | (60) | ||
Other comprehensive income (loss) | 337 | (48) | ||
Ending balance | $ (3,259) | $ (2,528) | (3,259) | (2,528) |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Other comprehensive income (loss) before reclassifications | $ 726 | $ 288 |
Equity - Amounts Reclassified O
Equity - Amounts Reclassified Out Of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Significant amounts reclassified out of each component of AOCI | |||||
Gains on derivative amount excluded from effectiveness testing | $ (620) | $ (420) | $ (1,662) | $ (1,054) | |
Tax expense (benefit) | 187 | 117 | 321 | 271 | |
Total reclassifications, net of tax | (2,308) | (1,884) | (4,580) | (5,081) | |
Losses (gains) on foreign currency forward exchange contracts | 5,050 | 1,920 | 10,703 | 5,433 | |
Pension and post-employment benefits | |||||
Significant amounts reclassified out of each component of AOCI | |||||
Amortization of actuarial losses and other | [1] | 63 | 28 | 188 | 83 |
Tax benefit | (13) | (5) | (40) | (17) | |
Total reclassifications, net of tax | 50 | 23 | 148 | 66 | |
Cash flow hedging activities | |||||
Significant amounts reclassified out of each component of AOCI | |||||
Total reclassifications, net of tax | (19) | (109) | |||
Reclassification out of accumulated other comprehensive loss | Cash flow hedging activities | |||||
Significant amounts reclassified out of each component of AOCI | |||||
Tax expense (benefit) | 3 | 3 | 4 | 10 | |
Total reclassifications, net of tax | (10) | (39) | (19) | (109) | |
Reclassification out of accumulated other comprehensive loss | Net investment hedging activity | Net investment hedging activities | |||||
Significant amounts reclassified out of each component of AOCI | |||||
Gains on derivative amount excluded from effectiveness testing | [2] | 3 | 10 | 16 | 19 |
Tax expense (benefit) | 1 | 2 | 4 | 4 | |
Total reclassifications, net of tax | (2) | (8) | (12) | (15) | |
Foreign currency forward exchange contracts | Reclassification out of accumulated other comprehensive loss | Cash flow hedging activities | |||||
Significant amounts reclassified out of each component of AOCI | |||||
Losses (gains) on foreign currency forward exchange contracts | [3] | (15) | (42) | (15) | (119) |
Treasury rate lock agreements | Reclassification out of accumulated other comprehensive loss | Cash flow hedging activities | |||||
Significant amounts reclassified out of each component of AOCI | |||||
Gains on derivative amount excluded from effectiveness testing | [2] | (6) | 0 | (18) | 0 |
Interest rate swap contracts | Reclassification out of accumulated other comprehensive loss | Cash flow hedging activities | |||||
Significant amounts reclassified out of each component of AOCI | |||||
Gains on derivative amount excluded from effectiveness testing | [2] | $ 8 | $ 0 | $ 10 | $ 0 |
[1] | (b) Amounts are included in the computation of net periodic benefit cost (see Note 9 ). | ||||
[2] | (a) Amounts are included in interest expense, net (see Note 8 | ||||
[3] | (c) Amounts are included in cost of products sold (see Note 8 ). |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 7.00% | 6.00% | 7.00% | 5.00% |
U.S. statutory tax rate | 21.00% | 21.00% | ||
Potential change in unrecognized tax benefits | $ 138 | $ 138 |
Legal Proceedings and Conting_2
Legal Proceedings and Contingencies (Details) $ in Millions | 1 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2020USD ($)claimcompany | Jun. 30, 2018USD ($) | Jun. 30, 2016investment_fund | Sep. 30, 2014company | Sep. 30, 2020USD ($)claim | Sep. 30, 2020USD ($)claimdirect_purchaser | Sep. 30, 2020USD ($)claimlawsuit | Sep. 30, 2020USD ($)claimclass_action | Sep. 30, 2020USD ($)claimend_payor_purchaser | Dec. 31, 2019USD ($) | |
Legal Proceedings and Contingencies | ||||||||||
Recorded accrual balance for litigation | $ | $ 70 | $ 70 | $ 70 | $ 70 | $ 70 | $ 70 | $ 290 | |||
Percentage of claims subject to settlement agreements | 95.00% | |||||||||
Depakote litigation in the District Court for the Southern District of Illinois | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of claims pending | 120 | 120 | 120 | 120 | 120 | 120 | ||||
Depakote litigation in federal and state courts | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of claims pending | 4 | 4 | 4 | 4 | 4 | 4 | ||||
Niaspan | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of individual plaintiff lawsuits | lawsuit | 4 | |||||||||
Number of purported class actions | class_action | 2 | |||||||||
Number of healthcare benefit providers acting as plaintiff in lawsuit | 1 | 1 | ||||||||
AndroGel antitrust litigation | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of generic companies with whom certain litigation related agreements were entered into | company | 2 | |||||||||
Number of generic companies named in claim whose court finding was reversed | company | 1 | |||||||||
AndroGel antitrust litigation | Disgorgement remedy | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Damages awarded against company | $ | $ 448 | |||||||||
Prescription drug abuse litigation | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of claims pending | 3,050 | 3,050 | 3,050 | 3,050 | 3,050 | 3,050 | ||||
Prescription drug abuse litigation in state courts | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of claims pending | 279 | 279 | 279 | 279 | 279 | 279 | ||||
Elliott Associates, L.P. | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of parties to lawsuit (in investment funds) | investment_fund | 5 | |||||||||
Generic drug pricing securities litigation in U.S. District Court of New Jersey | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of individual plaintiff lawsuits | lawsuit | 1 | |||||||||
Number of purported class actions | class_action | 3 | |||||||||
Testosterone Replacement Therapy Products Liability Litigation | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of claims pending | 175 | 175 | 175 | 175 | 175 | 175 | ||||
Number of claims consolidated for pre-trial purposes | 3,500 | 3,500 | 3,500 | 3,500 | 3,500 | 3,500 | ||||
Claims not being settled in master settlement agreement | Testosterone Replacement Therapy Products Liability Litigation | ||||||||||
Legal Proceedings and Contingencies | ||||||||||
Number of claims pending | 5 | 5 | 5 | 5 | 5 | 5 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Disaggregation of Revenue | |||||
Total net revenues | $ 12,902 | $ 8,479 | $ 31,946 | $ 24,562 | |
All other | |||||
Disaggregation of Revenue | |||||
Net revenues | 829 | 429 | 1,972 | 1,572 | |
Immunology | Humira | |||||
Disaggregation of Revenue | |||||
Net revenues | 5,140 | 4,936 | 14,680 | 14,252 | |
Immunology | Humira | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 4,189 | 3,887 | 11,819 | 10,895 | |
Immunology | Humira | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 951 | 1,049 | 2,861 | 3,357 | |
Immunology | Skyrizi | |||||
Disaggregation of Revenue | |||||
Net revenues | 435 | 91 | 1,065 | 139 | |
Immunology | Skyrizi | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 379 | 76 | 934 | 118 | |
Immunology | Skyrizi | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 56 | 15 | 131 | 21 | |
Immunology | Rinvoq | |||||
Disaggregation of Revenue | |||||
Net revenues | 215 | 14 | 450 | 14 | |
Immunology | Rinvoq | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 191 | 14 | 409 | 14 | |
Immunology | Rinvoq | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 24 | 0 | 41 | 0 | |
Hematologic Oncology | Imbruvica | |||||
Disaggregation of Revenue | |||||
Net revenues | 1,370 | 1,257 | 3,890 | 3,378 | |
Hematologic Oncology | Imbruvica | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 1,119 | 1,042 | 3,140 | 2,757 | |
Hematologic Oncology | Imbruvica | International | |||||
Disaggregation of Revenue | |||||
Collaboration revenues | 251 | 215 | 750 | 621 | |
Hematologic Oncology | Venclexta | |||||
Disaggregation of Revenue | |||||
Net revenues | 352 | 221 | 972 | 541 | |
Hematologic Oncology | Venclexta | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 204 | 142 | 596 | 364 | |
Hematologic Oncology | Venclexta | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 148 | 79 | 376 | 177 | |
Aesthetics | Botox Cosmetic | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 393 | 0 | 619 | 0 |
Aesthetics | Botox Cosmetic | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 237 | 0 | 384 | 0 |
Aesthetics | Botox Cosmetic | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 156 | 0 | 235 | 0 |
Aesthetics | Juvederm Collection | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 274 | 0 | 387 | 0 |
Aesthetics | Juvederm Collection | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 115 | 0 | 171 | 0 |
Aesthetics | Juvederm Collection | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 159 | 0 | 216 | 0 |
Aesthetics | Other Aesthetics | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 300 | 0 | 442 | 0 |
Aesthetics | Other Aesthetics | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 265 | 0 | 392 | 0 |
Aesthetics | Other Aesthetics | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 35 | 0 | 50 | 0 |
Neuroscience | Botox Therapeutic | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 523 | 0 | 820 | 0 |
Neuroscience | Botox Therapeutic | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 429 | 0 | 683 | 0 |
Neuroscience | Botox Therapeutic | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 94 | 0 | 137 | 0 |
Neuroscience | Vraylar | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 358 | 0 | 550 | 0 |
Neuroscience | Duodopa | |||||
Disaggregation of Revenue | |||||
Net revenues | 123 | 117 | 365 | 343 | |
Neuroscience | Duodopa | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 25 | 26 | 75 | 72 | |
Neuroscience | Duodopa | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 98 | 91 | 290 | 271 | |
Neuroscience | Ubrelvy | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 38 | 0 | 60 | 0 |
Neuroscience | Other Neuroscience | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 207 | 0 | 312 | 0 |
Neuroscience | Other Neuroscience | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 203 | 0 | 306 | 0 |
Neuroscience | Other Neuroscience | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 4 | 0 | 6 | 0 |
Eye Care | Lumigan/Ganfort | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 149 | 0 | 225 | 0 |
Eye Care | Lumigan/Ganfort | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 62 | 0 | 97 | 0 |
Eye Care | Lumigan/Ganfort | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 87 | 0 | 128 | 0 |
Eye Care | Alphagan/Combigan | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 123 | 0 | 192 | 0 |
Eye Care | Alphagan/Combigan | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 84 | 0 | 131 | 0 |
Eye Care | Alphagan/Combigan | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 39 | 0 | 61 | 0 |
Eye Care | Restasis | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 299 | 0 | 443 | 0 |
Eye Care | Restasis | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 284 | 0 | 422 | 0 |
Eye Care | Restasis | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 15 | 0 | 21 | 0 |
Eye Care | Other Eye Care | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 269 | 0 | 397 | 0 |
Eye Care | Other Eye Care | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 119 | 0 | 173 | 0 |
Eye Care | Other Eye Care | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 150 | 0 | 224 | 0 |
Women's Health | Lo Loestrin | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 134 | 0 | 214 | 0 |
Women's Health | Lo Loestrin | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 129 | 0 | 207 | 0 |
Women's Health | Lo Loestrin | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 5 | 0 | 7 | 0 |
Women's Health | Orilissa/Oriahnn | |||||
Disaggregation of Revenue | |||||
Net revenues | 25 | 27 | 87 | 59 | |
Women's Health | Orilissa/Oriahnn | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 24 | 27 | 84 | 58 | |
Women's Health | Orilissa/Oriahnn | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 1 | 0 | 3 | 1 | |
Women's Health | Other Women's Health | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 80 | 0 | 116 | 0 |
Women's Health | Other Women's Health | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 74 | 0 | 108 | 0 |
Women's Health | Other Women's Health | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 6 | 0 | 8 | 0 |
Other Key Products | Mavyret | |||||
Disaggregation of Revenue | |||||
Net revenues | 414 | 695 | 1,349 | 2,265 | |
Other Key Products | Mavyret | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 185 | 368 | 565 | 1,167 | |
Other Key Products | Mavyret | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 229 | 327 | 784 | 1,098 | |
Other Key Products | Creon | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 282 | 265 | 810 | 749 | |
Other Key Products | Lupron | |||||
Disaggregation of Revenue | |||||
Net revenues | 133 | 230 | 571 | 668 | |
Other Key Products | Lupron | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | 99 | 187 | 461 | 546 | |
Other Key Products | Lupron | International | |||||
Disaggregation of Revenue | |||||
Net revenues | 34 | 43 | 110 | 122 | |
Other Key Products | Linzess/Constella | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 248 | 0 | 381 | 0 |
Other Key Products | Linzess/Constella | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 240 | 0 | 370 | 0 |
Other Key Products | Linzess/Constella | International | |||||
Disaggregation of Revenue | |||||
Net revenues | [1] | 8 | 0 | 11 | 0 |
Other Key Products | Synthroid | United States | |||||
Disaggregation of Revenue | |||||
Net revenues | $ 189 | $ 197 | $ 577 | $ 582 | |
[1] | (a) Net revenues for the nine months ended September 30, 2020 include product revenues for Allergan products only from May 8, 2020, which was the acquisition closing date, through September 30, 2020 . |